Stolt-Nielsen S.A. (“the Company”) was incorporated in Luxembourg in 1974 as the holding company for all of our activities.

The Company is engaged primarily in two businesses.

The transportation business is conducted through Stolt-Nielsen Transportation Group Ltd. (“SNTG”) and its subsidiaries. SNTG is engaged in the worldwide transportation, storage and distribution of bulk liquid chemicals, edible oils, acids, and other specialty liquids. SNTG offers its customers a range of transportation and storage solutions on a worldwide basis through its intercontinental parcel tanker, coastal parcel tanker, river parcel tanker, tank container, terminal and rail services.

Stolt Parcel Tankers operates one of the world’s most technically advanced global fleet of parcel tankers, equipped to carry multiple parcels of bulk chemicals and specialty liquids in stainless steel tanks with specialized handling equipment, that meets the high service level needs of our customers.

Stolt Tank Containers operates one of the world’s largest fleet of stainless steel ISO tank containers. It specializes in arranging worldwide “door-to-door” transportation of bulk liquid chemicals, specialty liquids, and food-grade products on behalf of its customers.

Stolthaven Terminals provides high-quality bulk liquid storage and handling services. Stolthaven Terminals serve as distribution centers for the transfer of products between various modes of transportation, including ships, rail, barge and tank trucks.

The seafood business is carried out through Stolt Sea Farm (“SSF”) and its subsidiaries. SSF produces and markets turbot, sole, sturgeon and caviar.

CONTENTS

1 Financial Highlights

2 A message from the Chairman and CEO

6 Corporate Governance

11 Form 20-F

FINANCIAL HIGHLIGHTS

2006 Operating Revenue By Business				Operating Revenue
(U.S. $MILLIONS)				(U.S. $ MILLIONS)



2006 Operating Income By Business				Operating Income
(U.S. $MILLIONS)				(U.S. $ MILLIONS)



2006 Assets By Business				Cash Flow from Operations
(U.S. $MILLIONS)				(U.S. $ MILLIONS)

	For the years ended November 30,
(in millions, except per share data)	2006		2005		2004

Operating revenue	$	1,576.6	$	1,638.0	$	1,679.3
Operating income	$	169.2	$	182.4	$	134.6
Net income (loss)	$	199.9	$	483.0	$	74.9
Net income (loss) per Common share
Basic	$	3.21	$	7.45	$	1.21
Diluted	$	3.17	$	7.29	$	1.19

Weighted average number of Common shares and Common share equivalents outstanding

Basic	62.2		64.9		61.8
Diluted	62.9		66.2		62.6

Cash dividends paid per share	$	2.00	$	2.00	$	—

	As of November 30,
(in millions, except per share data)	2006		2005		2004

Long-term debt and capital lease obligations (including current portion)	$	486.2	$	493.6	$	820.4
Shareholders’ equity	$	1,172.6	$	1,213.1	$	883.3
Book value per share	$	19.77	$	18.92	$	13.94
Total number of Common shares outstanding	59.3		64.1		63.4

A MESSAGE FROM THE CHAIRMAN AND CEO

		Jacob Stolt-Nielsen (left)
		Chairman
		Stolt-Nielsen S.A.

		Niels G. Stolt-Nielsen (right)
		Chief Executive Officer
		Stolt-Nielsen S.A.

We continue to constantly innovate to ensure the most efficient use of our assets and lowest possible operating costs. Nevertheless, with such a significant order book combined with all the political and environmental challenges our world is facing, we find it prudent to be cautious in 2007.

Stolt-Nielsen S.A. (SNSA) achieved good operational results in 2006, while continuing to implement a range of strategic initiatives that will support our development. The underlying operating results demonstrate the strong positions that we have established in attractive markets and our excellent operational capabilities. This progress is underpinned by sustained growth in world trade at about 3 percent overall and 6 percent in emerging markets. In China, where we have made significant investments in recent years, economic growth continues in double digits, at around 10 percent.

Stolt-Nielsen Transportation Group’s (SNTG) performance reflected the continued strength of the parcel tanker market, along with solid results at our terminal and tank container divisions. At Stolt Sea Farm (SSF), high prices and strong market demand continued to drive solid results in our turbot division.

For the full year ended November 30, 2006, SNSA reported net income of $199.9 million, compared with net income of $483.0 million (of which $126.0 was from income continuing operations) a year ago. Earnings per share were $3.17, compared with $7.29 (of which $1.90 was from income from continuing operations) in 2005.

In regards to our ongoing legal situation, while we have made significant progress addressing customer-related issues and at this time remain in the European Commission’s substantial expenditure in defending SNSA’s participation in the U.S. Department of Justice’s Anti-Trust Division’s Amnesty Program. We went into the Amnesty Program as it was the right thing to do.

STOLT-NIELSEN TRANSPORTATION GROUP

SNTG reported full-year operating revenue of $1.5 billion, up from $1.4 billion in 2005, and operating income of $174.2 million, compared with $182.9 million a year ago. Operating income was negatively impacted by $42.0 million of legal advisor expenses in 2006, versus $30.2 million in 2005, as well as a $36.3 million increase in year-over-year net (after hedges and customer surcharges) bunker fuel costs, and $21.9 million of customer-related antitrust provisions in 2006 versus $39.1 million in 2005.

As we look out on the world today, the view is inevitably dominated by the enormous trade volumes flowing into and out of China, India and many other South East Asian countries. Chemical production is ramping up quickly in the Middle East Gulf region, with output expected to reach nearly 40 million tons by 2009, or about double the amount produced last year. Much of this new production will be bound for the Asia-Pacific region, and meeting the demand for transportation services will require creative new approaches to shipping, storage and distribution. At the same time, downstream chemical production within China is accelerating so rapidly that the People’s Republic will likely become a significant exporter in many chemicals in the not-too-distant future. These changes in the flow of cargo, will require considerable flexibility to adapt to, but also interesting opportunities.

2006 was in many ways the year in which the true scope and dimensions of our work and investment over the years in China began to materialize. By leveraging our emerging state-of-the-art terminals network in China, Stolt Tank Containers’ expanding domestic operations, and our growing Stoltchem coastal fleet, SNTG will be able to offer its customers unrivaled domestic transportation and storage in addition to our international operations.

The growth in the demand for transportation and other macro-inflationary pressures has led to higher operating costs. Bunker costs have been a major issue over the last several years. Though oil prices subsided to just over $50 a barrel by year end—after spiking at more than $70 per barrel at mid year—SNTG’s bunker fuel outlays increased on average by about 25 percent on a year-over-year basis in 2006. The more recent challenge the industry has started to feel is the demand for qualified crew. With the start of deliveries of ships from a record order book in most shipping segments, the recruitment, training and retainment of crew will be a challenge and costly.

New regulations are also driving up costs. While we welcome the spirit of new IMO regulations, the latest of which specify—among other things—double hulls for vegetable oils, bio-diesel and certain other cargoes, we must also acknowledge that such regulations come at a price.

Stolt Parcel Tankers reported operating income of $130.0 million in 2006, down from $152.6 million in 2005. Overall conditions in the parcel tanker segment remained strong, though growth in contract renewal rates slowed compared with 2005, as bunker fuel prices rose.

During 2006 and 2007, SNTG announced several new building contracts and currently has on order 18 new buildings that will join SNTG’s deep-sea fleet. Fourteen of the ships are 43,000-to-44,000 deadweight ton (dwt) parcel tankers. The new fully double-hulled parcel tankers will meet both Marpol Annex I and Annex II cargo requirements and, with ship IMO ship type I, II, and III capabilities, will be able to transport the full range of difficult-to-handle cargoes that SNTG carries. The other four ships are 44,000 dwt parcel tankers. These ships are to be built to IMO II specifications, providing the additional segregations and cleaning capacity required to transport both vegetable oils and chemicals. Deliveries are scheduled from late 2007 through 2012.

In addition, SNTG and its joint venture partner in China—Sinochem—are in the process of adding seven new coastal tankers of approximately 3,700 dwt to the partnership’s Stoltchem fleet, which serves China’s growing cabotage and regional markets.

During 2006, SNTG also launched the Excellence in Safety program, a major initiative aimed at “providing our customers with the safest, most reliable and most environmentally friendly bulk-liquid transportation services in the world.” Working closely with Det Norske Veritas, the ship safety experts, SNTG has set a goal of becoming the world’s safest provider of seaborne chemical transportation.

Training, courses, and education are constant features in our organization. The cargoes we carry represent considerable risks to the crews, the environment and society if not handled carefully and correctly. The safe navigation of our ships must never be compromised. For this reason our ships are always maintained to the

highest standard and our crews are continuously trained for safety in all work procedures. We are aware of our responsibility to society. Besides, safety is good business.

Stolthaven Terminals reported operating income of $30.0 million in 2006, up from $23.4 million in 2005.

2006 was a year of considerable expansion and investment for Stolthaven. In June, we finalized a joint-venture agreement to build a state-of-the-art chemical and oil products terminal in Tianjin, China, a major gateway to the northern region of the People’s Republic. Shortly thereafter we completed the acquisition of a 50 percent interest in Oiltanking Antwerp N.V., a major specialty chemical hub serving in the Antwerp Rotterdam Amsterdam region. Stolthaven closed out the year by announcing in late December that it had finalized a second joint-venture agreement in China, this one to build a deep-water petrochemical terminal in Ningbo, which serves East China.

Our strategic goal is to continue to strengthen Stolthaven’s global network by achieving organic growth in our wholly owned terminals, continuing to implement our expansion in China, and increasing our penetration of other emerging markets.

Stolthaven represents a competitive advantage by helping SNTG to better serve its parcel tanker customers through the optimization of its deep-sea fleet. Stolthaven has also demonstrated its ability to deliver solid margins and strong cash flow. Because it is a less cyclical business, Stolthaven helps dampen the effects of the inevitable cyclical downturn in the tanker business.

Stolt Tank Containers (STC) reported operating income of $43.1 million in 2006, up from $29.8 million in 2005. STC’s performance for the year reflected continued strength in markets worldwide, highlighted by particularly strong growth in China. Increased profitability also was driven by successful actions to enhance margins, and a significant expansion in STC’s food-grade operations.

Asia remained a focal point of business development. In early 2007, STC formally opened its major new depot in Nanhui. The new facility complements STC’s existing depots in the region, located in Shanghai, Tianjin, Taipei and STC’s Asia-Pacific hub on Jurong Island in Singapore. STC also operates three depots in Japan.

During the year, STC continued to expand its fleet—already the world’s largest—with the addition of 1,000 newbuilds, bringing the total fleet to over 20,000 units.

STC successfully obtained its ISO 9000 recertification in 2006 and also began the process of acquiring its SQAS (Safety & Quality Assessment System) assessment. The system is managed by Cefic, the European Chemical Council, and is designed to evaluate the quality, safety, security and environmental performance of participants.

STOLT SEA FARM

Stolt Sea Farm reported full-year operating revenue of $60.4 million and operating income of $16.2 million, compared with operating revenue of $245.5 million ($52.7 million excluding operations which were contributed to Marine Harvest on April 29, 2005) and operating income of $15.3 million ($10.4 million excluding operations contributed to Marine Harvest on April 29, 2005 and the recognition of a previously deferred gain of $12.2 million on the sale of Southern bluefin tuna quota rights) in 2005. SSF’s 25 percent share of Marine Harvest contributed net income of $60.8 million in 2006 up from $11.3 million in 2005.

Operating results for 2006 reflected the continued strength of SSF’s increasingly successful turbot operations.

On March 29, 2006, SNSA received a prepayment of € 293.8 million ($353.5 million at the then current exchange rate) from the sale of its 25 percent ownership of Marine Harvest. The transaction, which had been subject to approval by U.K. and French competition authorities, closed on December 29, 2006 and SNSA recognized a gain of $21.8 million on the transaction in the first quarter of 2007.

On December 18, 2006, Stolt Sea Farm announced the sale of its Southern bluefin tuna business for $70 million. SNSA recognized a first-quarter 2007 gain of $44.3 million on the sale. Also in December 2006, SSF announced that it had reacquired for $3.8 million in cash and the assumption of $1.3 million in loans 75 percent of Sterling Caviar LLC, which had been sold to Marine Harvest.

These two disposals and one acquisition concludes our restructuring of SSF away from the low technology species of salmon and tuna, over to the more difficult high technology species of turbot, sole, sturgeon and caviar production. We are enthusiastic about the future of SSF, in particular about large scale production of sole.

FINANCE AND DIVIDEND

Capital expenditures and investments in joint ventures and equity method investees for the full year totaled $298.8 million and $58.7 million respectively, most of which was related to progress payouts on our parcel tanker new buildings, ships acquired by SNTG, expansion of our tank container fleet, and the expansion of our Stolthaven terminals operations, including our investments in Antwerp, Belgium and China. We currently anticipate approximately $490 million in capital expenditures and $73 million of investments in plus $41 million of shareholder loans to joint ventures and equity method investees in 2007.

On December 1, 2006, SNSA completed the share repurchase program announced on August 25, 2005, which authorized SNSA to repurchase up to $200 million worth of its Common Shares or related American Depositary Shares. On completion of the program, SNSA repurchased 6,852,240 Common Shares with a total value of approximately $200 million.

On December 6, 2006, SNSA paid an interim dividend of $0.50 per Common Share to shareholders of record as of November 20, 2006. The SNSA Board of Directors has recommended a final payment for 2006 of $0.50 per Common Share on July 5, 2007 to shareholders of record as of June 20 2007.

For 2006, the employee performance incentive plans for SNSA, SNTG, and SSF made payments of $1.4 million, $11.1 million, and $0.6 million, respectively.

SNSA is a company built on world-class assets: superbly maintained ships, a global network of state-of-the-art terminals, the world’s largest fleet of tank containers and high-tech aquaculture facilities. Yet the quality of these impressive assets is, in fact, nothing more than a reflection of the quality, dedication, creativity and skill of that unique population of people we proudly call “the employees of Stolt-Nielsen S.A.” The women and men of SNSA are a truly formidable competitive advantage.

Even though there are no major signs of slow down in our business, we need to keep a historical perspective. Four consecutive years of strong shipping markets are unheard of. However, we have made significant investments to strengthen our position in attractive higher growth markets, including China and the Middle East Gulf region. In addition, we continue to constantly innovate to ensure the most efficient use of our assets and lowest possible operating costs. Nevertheless, with such a significant order book combined with all the political and environmental challenges our world is facing, we find it prudent to be cautious in 2007.

/s/ JACOB STOLT-NIELSEN

Jacob Stolt-Nielsen

Chairman

Stolt-Nielsen S.A.

/s/ NIELS G. STOLT-NIELSEN

Niels G. Stolt-Nielsen

Chief Executive Officer

Stolt-Nielsen S.A.

May 21, 2007

CORPORATE GOVERNANCE

INTRODUCTION

Stolt-Nielsen S.A. (“SNSA”) maintains high standards of Corporate Governance. Corporate Governance addresses the interaction between SNSA’s shareholders, the Board of Directors and management.

Luxembourg Public Limited Companies Act of 1915 governs the incorporation and management of SNSA. In addition, relevant Luxembourg and international law also applies to the operation of the business of SNSA. Norwegian securities law will apply as a result of SNSA being listed on the Oslo Børs. Until May 21, 2007, SNSA was also listed on the Nasdaq National Market and as a result, U.S. securities law will also apply to SNSA to late May 2008.

Being incorporated in Luxembourg and listed on the Oslo Børs, SNSA is subject to Corporate Governance regulations under Luxembourg company law and the Norwegian Code of Practice for Corporate Governance. Adherence to the Norwegian Code of Practice is based on a “comply or explain” principle, whereby companies are expected to either comply with the Norwegian Code of Practice or explain why they have chosen an alternative approach. Since SNSA is subject to various requirements, we explain the basic principles for SNSA Corporate Governance.

BOARD SIZE AND STRUCTURE

The business affairs of SNSA are managed under the direction of the SNSA Board of Directors. The Board of Directors may delegate authority to the Chairman, specified committees of the Board of Directors, or to SNSA’s management.

As provided in SNSA’s Articles of Incorporation, the Board of Directors shall be composed of at least three and not more than nine Directors. The Board of Directors believes that the optimal size for the Board of Directors should be six to eight Directors. The Board of Directors’ size is flexible depending on the circumstances and the qualifications of proposed candidates.

The composition of the Board of Directors shall ensure that the SNSA Board of Directors can attend to the common interests of all shareholders and meets the company’s need for expertise, capacity and diversity.

The Directors are elected at a General Meeting of Shareholders by a simple majority vote of the outstanding shares (Common and Founder’s) represented at the meeting for a period of one year. Directors may be removed with or without cause by the votes of the holders of more than 50 percent of shares present or represented at a General Meeting. In the event of a vacancy on the Board of Directors because of death, retirement, resignation or dismissal, the remaining members of the Board of Directors can fill such vacancy and appoint a member to act until the next General Meeting of shareholders at which the Directors so elected shall be confirmed. SNSA does not have a Nomination Committee.

The composition of the Board of Directors shall ensure that it can operate independently of any special interests. Three of the current seven SNSA Directors, Roelof Hendriks, Christer Olsson, and Christopher J. Wright are considered to be independent according to the Norwegian Code of Practice. James B. Hurlock is not considered to be an independent director due to his service as an Interim Chief Executive Office of Stolt-Nielsen Transportation Group Ltd. from July 2003 to June 2004. In addition, Håkan Larsson has been nominated to serve on the Board of Directors pending approval at the Annual General Meeting of Shareholders scheduled for June 14, 2007 and will be considered to be independent according to the Norwegian Code of Practice.

The Chairman of the Board of Directors is elected by the Annual General Meeting of Shareholders.

The Board of Directors may appoint a Board Secretary who does not need to be member of the Board of Directors.

BOARD COMMITTEES

The Board of Directors has established the Audit Committee, Compensation Committee, and Legal Committee.

The Audit Committee is composed of at least three members; normally each of whom is independent pursuant to all applicable regulatory requirements. The Compensation Committee is composed of at least three members of which at least one is independent pursuant to all regulatory requirements applicable to SNSA. The Legal Committee is composed of one member.

Each Audit Committee member must meet a financial literacy requirement, and at least one member must have experience or background, which results in being a financial expert.

Each Committee has a Chair who reports the activities of such Committee at meetings of the full Board of Directors.

The Board of Directors periodically reviews the size, structure, and function of the Board Committees.

The Audit Committee, Compensation Committee, and Legal Committee have written charters. These charters shall be reviewed and reassessed by the Board on an annual basis.

INDEPENDENCE, EQUAL TREATMENT OF SHAREHOLDERS, AND TAKEOVERS

The Board of Directors reviews at least annually the financial and other relationships between Directors and SNSA.

SNSA conducts an appropriate review of all related party transactions for potential conflict of interest situations on an ongoing basis and all such transactions shall be approved by the SNSA’s Audit Committee as well as publicly disclosed.

The Board of Directors will publicly disclose any serious offer for SNSA or a substantial portion of the assets of SNSA. The Board of Directors will also obtain a fairness opinion or valuation from an independent third party for any material transactions between SNSA and affiliates such as: members of the Board of Directors, members of the executive management or close associates of any such parties; and between companies in the same group where any of the companies involved have minority shareholders.

Any transactions SNSA carries out in its own shares are carried out either through the stock exchange or at prevailing stock exchange prices if carried out in any other way. Directors and the executive management must notify the Board of Directors if they have any material direct or indirect interest in any transaction entered into by SNSA. Directors with such a direct or indirect interest may not participate in voting for such transactions.

The Board of Directors and the Board Committees may retain independent advisors, as it deems appropriate in its discretion. SNSA shall be responsible for the expenses of any such advisor.

SNSA has two classes of shares, Common Shares and Founder’s Shares. Under Luxembourg Company law, Founder’s Shares are not considered to be part of the capital.

Except for matters where applicable law requires the approval of both classes of shares voting as separate classes, Common Shares and Founder’s Shares vote as a single class on all matters submitted to a vote of the shareholders, with each share entitled to one vote.

Under the Articles of Incorporation, holders of Common Shares and Founder’s Shares participate in annual dividends, if any are declared by the Company, in the following order of priority: (i) $0.005 per share to Founder’s Shares and Common Shares equally; and (ii) thereafter, all further amounts are payable to Common Shares only. Furthermore, the Articles also set forth the priorities to be applied to each of the Common and Founder’s Shares in the event of liquidation.

Under the Articles, in the event of a liquidation, all debts and obligations of SNSA must first be paid and thereafter all remaining assets of SNSA are paid to the holders of Common Shares and Founder’s Shares in the following order of priority: (i) Common Shares ratably to the extent of the stated value thereof (i.e. $1.00 per share); (ii) Common Shares and Founder’s Shares participate equally up to $0.05 per share; and (iii) thereafter, Common Shares are entitled to all remaining assets.

While the Board of Directors is authorized to restrict, reduce, or prevent the ownership of shares if it appears to the Board of Directors that such ownership may threaten SNSA with grave and imminent harm, it is the intention for the Board of Directors to assess any takeover offer for SNSA or a substantial portion of SNSA’s assets, make a recommendation on any such offer, and call for a General Meeting of Shareholders to vote on the acceptance or rejection of such an offer.

As of May 21, 2007, Fiducia Ltd., a company owned by trusts established for the benefit of certain members of the Stolt-Nielsen family, together with certain members of the Stolt-Nielsen family, controlled 58.2 percent of the outstanding shares of SNSA entitled to vote generally on matters brought to a vote of shareholders of SNSA. As a result, the Stolt-Nielsen family currently directly and indirectly exercises a controlling influence over SNSA’s operations and has sufficient voting power to control the outcome of matters requiring shareholder approval including: the composition of SNSA’s Board of Directors

which has the authority to direct SNSA’s business and to appoint and remove SNSA’s officers; approving or rejecting a merger, consolidation or other business combination; raising future capital; and amending SNSA’s Articles of Incorporation which govern the rights attached to SNSA’s Common Shares. This control may also make it difficult to take control of SNSA without the approval of the Stolt-Nielsen family. Additionally, the interests of the Stolt-Nielsen family may conflict with the interests of SNSA’s other investors.

BOARD MEETINGS

The Board of Directors holds at least four regularly scheduled meetings a year. Meeting schedules are approved by all members of the Board of Directors.

Decisions of the Board of Directors shall be taken by a majority of the votes cast by the Directors present and represented at the meeting provided a quorum is present. The Board of Directors may also act by unanimous written consent.

BOARD MEETINGS – EXECUTIVE SESSIONS

Independent Directors meet at regularly scheduled executive sessions without the participation of the Directors who are not independent. Directors who are not independent may participate in such sessions to the extent the Board of Directors deems to be appropriate and is permitted by applicable law and the rules of the Oslo Børs.

ANNUAL AND EXTRAORDINARY GENERAL MEETINGS

The Board of Directors is responsible for calling both Annual and Extraordinary General Meetings of Shareholders. A specific quorum is not needed except in the case of certain extraordinary matters for which a quorum of 50 percent of voting shares is required.

The Board of Directors is obligated to hold an Annual General Meeting every year in Luxembourg, normally at the registered office. Variation from such date as set forth in the Articles of Incorporation (third Thursday in April) must be approved by shareholders.

A shareholder or group of shareholders representing at least one-fifth of the outstanding voting shares may request a General Meeting in writing indicating the agenda thereof. The Board of Directors will be obligated to hold the meeting within thirty days after receipt of such request.

Notices for both Annual and Extraordinary General Meetings shall be sent by mail to all holders recorded in the Register no later than twenty days before the date set for the General Meeting.

Notices should provide sufficient information on all matters to be considered at the General Meeting, voting instructions and opportunity to vote by proxy.

Matters at the General Meetings are restricted to those set forth in the agenda.

DIRECTOR QUALIFICATIONS, CANDIDATES, RESPONSIBILITIES, ORIENTATION AND CONTINUING EDUCATION

The Chairman of the Board of Directors identifies and evaluates proposed candidates for nomination to the Board of Directors. The Board of Directors authorizes invitations to candidates. Individuals are selected for nomination to the Board of Directors based on their business or professional experience, the diversity of their background, and their array of talents and perspectives.

Management is available to discuss matters of concern to the Board of Directors and the Board of Directors has regular access to senior management.

The basic duties and responsibilities of the Directors include attending Board of Directors’ meetings, preparing for meetings by advance review of any meeting materials and actively participating in the Board of Directors’ discussions. Directors are also expected to make themselves available outside of the Board of Directors’ meetings for advice and consultation.

The Board of Directors ensures that SNSA has good internal controls in accordance with the regulations that apply to its activities, including SNSA’s corporate values and ethical guidelines.

SNSA has a Code of Business Conduct which applies to all directors, officers and employees, which is publicly available and complies with the definition of a “code of ethics” set out in the Sarbanes-Oxley Act and any of the U.S. Securities and Exchange Commission regulations. Any waivers of the Code of Business Conduct for directors or executive officers are approved by the Board and shall be disclosed in the Annual Report.

DIRECTOR’S COMPENSATION AND STOCK OWNERSHIP

The Board of Directors on an annual basis reviews the Director’s compensation including stock-based compensation under plans approved at the General Meeting. The review includes a comparison of SNSA’s Director compensation practices against the practices of comparable U.S. and European companies.

Members of the Board of Directors and/or companies with which they are associated shall not in principle take on specific assignments for SNSA in addition to their appointment as a member of the Board of Directors. If they do nonetheless take on such assignments this should be disclosed to the full Board of Directors. The remuneration for such additional duties should be approved by the Board of Directors.

The remuneration including stock-based compensation awarded to SNSA’s Board of Directors for their service as Directors is disclosed in aggregate at the Annual General Meetings and in the Annual Report. Any remuneration in addition to normal directors’ fees shall be specifically identified.

EVALUATION OF THE CHIEF EXECUTIVE OFFICE (“CEO”) AND EXECUTIVE MANAGEMENT

The Compensation Committee established guidelines for the remuneration of the members of the executive management. These guidelines are communicated to shareholders annually.

The performance and compensation of the CEO is reviewed periodically by the Compensation Committee and annually by the Board of Directors.

Remuneration of the members of executive management is disclosed in aggregate in SNSA’s Annual Report.

SNSA EQUITY AND DIVIDENDS

The authorized share capital of SNSA may only be increased or reduced by resolution of shareholders as provided in the Articles of Incorporation and under Luxembourg company law. The Board of Directors is authorized until the next Annual General Meeting of Shareholders to increase the issued share capital within the limits of the SNSA authorized capital, or to purchase its own shares.

The authorized share capital of SNSA is 69 million Common Shares and 17.25 million Founder’s Shares, no par value. As of May 21, 2007, 66,133,796 Common Shares and 16,533,449 Founder’s Shares were issued and 59,500,418 Common Shares and 14,875,105 Founder’s Shares were outstanding. The Board of Directors has recommend to the Annual General Meeting of Shareholders to be held on June 14, 2007, that the authorized share capital of SNSA be reduced to 65 million Common Shares and 16.25 million Founder’s Shares. Furthermore, the Board of Directors has recommend to the same Annual General Meeting of Shareholders that the issued share capital be reduced by 2 million Common Shares via the cancellation of Common Shares held in treasury. The excess of authorized shares compared to outstanding shares is intended to be available for the exercise of stock options under SNSA stock option plans.

Shareholder approval is required prior to the issuance of new shares which are more than the currently authorized share capital of SNSA.

The suppression of preemptive rights, except for purposes of stock option issuance, is authorized until the next Annual General Meeting of Shareholders.

SNSA’s share option plans have been approved at the Annual General Meeting. The plans were established to create a long-term common interest among the directors, the employees, and SNSA’s shareholders. The Compensation Committee administers SNSA’s share option program.

Interim dividends can be declared and paid in any fiscal year by approval of the Board of Directors. Final dividends may only be paid after approval by the shareholders at the Annual General Meeting of Shareholders.

The Board of Directors has established a dividend policy that is available on the SNSA website.

Article 36 of the Articles of Incorporation limits individual shareholdings to 20 percent, single U.S. person shareholding to 9.9 percent and shareholders of any single country in aggregate to 49.9 percent.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee established guidelines in respect of the use of the Independent Registered Public Accounting Firm by the company’s executive management for services other than the audit. The Audit Committee shall receive annual written confirmation from the Independent Registered Public Accounting Firm that such firm continues to satisfy the requirements for independence. In addition, the Independent Registered Public Accounting Firm shall provide the Audit Committee with a summary of all services in addition to audit work that has been undertaken for the company.

The Independent Registered Public Accounting Firm shall submit the main features of the plan for the audit of SNSA to the Audit Committee annually.

The Independent Registered Public Accounting Firm shall participate in meetings of the Audit Committee that deal with the annual accounts. At these meetings, the Independent Registered Public Accounting Firm shall review any material changes in the company’s accounting principles, comment on material management estimates and judgements, and report all matters on which there has been disagreement between the firm and the executive management of the company.

The Independent Registered Public Accounting Firm shall at least once a year present to the Audit Committee a review of the company’s internal control procedures, including identified material weaknesses and significant deficiencies.

The Audit Committee shall hold a meeting with the Independent Registered Public Accounting Firm at least once a year at which neither the chief executive nor any other member of the executive management is present.

RISK MANAGEMENT AND INTERNAL CONTROL

The Board of Directors is responsible for the SNSA’s system of internal control, which covers financial, operational, and compliance controls as well as the risk management processes. SNSA’s system of internal control, which is in accordance with the framework established by the Committee of Sponsoring Organizations, is designed to manage rather than eliminate the risk of failure to achieve business objectives and provide reasonable assurance that SNSA is operating legally, ethically and within approved financial and operational policies and procedures with sufficient safeguards against material financial statements misstatement or loss of assets.

The Board of Directors, through the Audit Committee, oversees the monitoring of compliance with its internal control system. The Audit Committee meets on a quarterly basis to review and discuss results of internal audits performed by the Operational Review Department. This also includes matters of an ethical nature. All employees, customers, suppliers, and other parties have direct access to the Audit Committee to report any potential illegal or unethical matters.

The Board of Directors carry out an annual review of SNSA’s most significant areas of exposure to risk and its internal control system. SNSA’s business heads are responsible for reporting their business risk to the Board of Directors.

Risks related to SNSA and its internal control environment have been highlighted in SNSA’s Annual Report.

INFORMATION AND COMMUNICATIONS

All information distributed to SNSA’s shareholders is published on SNSA’s website.

SNSA promptly submits all material press releases to Oslo Børs, disseminates such material press releases through an approved news wire service that provides simultaneous and broad distribution, and files with or furnishes to the U.S. Securities and Exchange Commission material press releases on Form 6-K.

Copies of audited financial statements of SNSA shall be distributed to shareholders prior to the Annual General Meeting of Shareholders and shall be filed with the Oslo Børs and the U.S. Securities and Exchange Commission at the time it is distributed to shareholders.

SNSA publishes an overview each year of the dates for major events such as its Annual General Meeting of Shareholders, publication of interim reports, public presentations, dividend payment date if appropriate, etc.

After each quarterly earnings release, SNSA holds a conference call, and from time to time a live presentation, to discuss the results and respond to investor and analyst questions. The conference call is open to all those who wish to participate. All conference calls have a telephone dial-in and are webcast with playback options available.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

	o	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

	x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended November 30, 2006

OR

	o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

	o	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-16977

STOLT-NIELSEN S.A.

(Exact name of Registrant as specified in its charter)

LUXEMBOURG

(Jurisdiction of incorporation or organization)

c/o STOLT-NIELSEN LIMITED

Aldwych House

71-91 Aldwych

London WC2B 4HN, England

(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class		Name of exchange on which registered
Common Shares, no par value		None

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

Common Shares, no par value		59,296,216
Founder’s Shares, no par value		14,824,054

Indicate by check-mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes x No o

If this report is an annual report or transition report, indicate by check-mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes o No x

Indicate by check mark whether the registrant (1) has filed all Reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such Reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x

Accelerated filer o

Non-accelerated filer o

Indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 o Item 18 x

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

TABLE OF CONTENTS


		PART I
Item 1.		Identity of Directors, Senior Management and Advisers
Item 2.		Offer Statistics and Expected Timetable
Item 3.		Key Information
		Selected Consolidated Financial Data
		Risk Factors
Item 4.		Information on the Company
		History and Development of the Company
		General
		Recent Significant Developments
		Business Overview
		Seasonality
		Key Supplier Relationships
		Regulation
		Competition
		Insurance
		Significant Subsidiaries
		Research and Development; Patents and Licenses
		Property, Plants and Equipment
Item 4.A.		Unresolved Staff Comments
Item 5.		Operating and Financial Review and Prospects
		Introduction
		Management Overview
		Factors Affecting Our Financial Condition and Results of Operations
		Critical Accounting Estimates
		New Accounting Pronouncements Adopted During 2006
		Impact of Recent Accounting Standards
		Strategic Outlook
		Outlook for Fiscal Year 2007
		Results of Operations
		Liquidity and Capital Resources
		Contractual Obligations
		Off-Balance Sheet Arrangements
		Safe Harbor
Item 6.		Directors, Senior Management and Employees
		Directors and Senior Management
		Compensation
		Board Practices
		Employees
		Unions
		Share Ownership
Item 7.		Major Shareholders and Related Party Transactions
		Major Shareholders
		Related Party Transactions

Item 8.		Financial Information
		Consolidated Statements and Other Financial Information
		Legal Proceedings
		Dividends
		Significant Changes
Item 9.		The Offer and Listing
		Stock Trading History
		Markets
Item 10.		Additional Information
		Organization and Register
		Articles of Incorporation
		Material Contracts
		Exchange Controls
		Taxation
		Documents on Display
Item 11.		Quantitative and Qualitative Disclosures about Market Risk
		Currency Rate Exposure
		Interest Rate Exposure
		Bunker Fuel Exposure
		Market Risk Assessment
Item 12.		Description of Securities Other than Equity Securities
		PART II
Item 13.		Defaults, Dividend Arrearages and Delinquencies
Item 14.		Material Modifications to the Rights of Security Holders and Use of Proceeds
Item 15.		Controls and Procedures
Item 16.		[Reserved]
Item 16A.		Audit Committee Financial Expert
Item 16B.		Code of Ethics
Item 16C.		Principal Accountant Fees and Services
		Audit Fees
		Audit-Related Fees
		Tax Fees
		All Other Fees
		Audit Committee Pre-Approval Policy and Procedure
Item 16D.		Exemptions from the Listings Standards for Audit Committees
Item 16E.		Purchases of Equity Securities by the Issuer and Affiliated Purchasers
		PART III
Item 17.		Financial Statements
Item 18.		Financial Statements
		Consolidated Financial Statements
Item 19.		Exhibits

INTRODUCTION

Stolt-Nielsen S.A. is a Luxembourg registered company. In this annual report on Form 20-F (the “Report”), the terms “we,” “us,” “our,” “SNSA,” and “Stolt-Nielsen” refer to Stolt-Nielsen S.A. and, unless the context otherwise requires, our consolidated subsidiaries. References in this Report to “SNTG” refer to Stolt-Nielsen Transportation Group Ltd., a Bermuda corporation and a wholly owned subsidiary of SNSA. References to “SSF” or “Stolt Sea Farm” refer to Stolt Sea Farm Holdings plc, an English company and wholly owned subsidiary of Stolt-Nielsen S.A. and Stolt Sea Farm Investments B.V., a Dutch company and wholly owned subsidiary of SNSA and, unless the context otherwise requires, their consolidated subsidiaries. References to “SOSA” or “Stolt Offshore” refer to Stolt Offshore S.A., a Luxembourg company and, unless the context otherwise requires, its consolidated subsidiaries. On April 10, 2006, Stolt Offshore S.A. changed its name to Acergy S.A. As of February 19, 2004, SOSA was deconsolidated from Stolt-Nielsen and as of January 13, 2005, we sold our remaining ownership interest in SOSA. For additional information on the deconsolidation of SOSA, see Item 4. “Information on the Company—Business Overview” and Item 5. “Operating and Financial Review and Prospects—Management Overview.” During fiscal year 2004, SSF was a consolidated subsidiary of Stolt-Nielsen. On April 29, 2005, we completed a joint venture with Nutreco Holding N.V. (“Nutreco”) consisting of most of SSF’s operations and the fish farming and sales business of Nutreco. The joint venture was called Marine Harvest N.V. (“Marine Harvest”), a worldwide fish farming, processing and sales business. We contributed most of the operations of SSF into the Marine Harvest joint venture, retaining SSF’s turbot and sole operations in Europe and Southern bluefin tuna ranching operations in Australia. During fiscal year 2006 and most of fiscal year 2005, we owned 25% of the shares of Marine Harvest and Nutreco owned the remaining 75%. When used in this Report with reference to the period after April 29, 2005, SSF means the remaining turbot, sole and Southern bluefin tuna businesses. We began accounting for our 25% share of Marine Harvest under the equity method of accounting beginning in May 2005. On March 6, 2006, we announced the sale of our entire 25% ownership interest in Marine Harvest and on March 29, 2006, we received prepayment of €293.8 million ($353.5 million at the then current exchange rate) representing our full share of the proceeds of the sale. The transfer of ownership, which remained subject to approvals from regulatory and competition authorities, was completed on December 29, 2006. The results of our 25% ownership interest in Marine Harvest have been included in SNSA’s consolidated results using the equity method for the year ended November 30, 2006. For additional information on the contribution of our net assets to and sale of our ownership interest in Marine Harvest, see Item 4. “Information on the Company—General” and Item 5. “Operating and Financial Review and Prospects—Management Overview—Description of our Business.” Please also see Note 5 to the Consolidated Financial Statements, included in Item 18 of this Report. On December 18, 2006, we announced the completion of the sale of SSF’s Southern bluefin tuna business. The results of SSF’s Southern bluefin tuna business have been included in SNSA’s consolidated results for the year ended November 30, 2006. For additional information on the sale of SSF’s Southern bluefin tuna business, see Item 4. “Information on the Company—Business Overview” and Item 5. “Operating and Financial Review and Prospects—Management Overview.” On December 22, 2006, we announced the completion of SSF’s reacquisition from Marine Harvest of a 75% equity interest in its sturgeon and caviar business, Sterling Caviar LLC for $5.1 million. Sterling Caviar LLC has been included in SNSA’s consolidated results beginning with the first quarter of 2007. For additional information on the reacquisition of SSF’s sturgeon and caviar business, see Item 4. “Information on the Company—Business Overview” and Item 5. “Operating and Financial Review and Prospects—Management Overview.”

References to our activities by years refer to our fiscal years ending November 30.

Our common shares, no par value and $1.00 stated value (“Common Shares”) are listed in Norway on the Oslo Børs under the ticker symbol “SNI”. Our Common Shares also traded in the form of American Depositary Shares (“ADSs”) (each ADS representing one Common Share) in the United States of

America (“U.S.”) on the Nasdaq Global Select Market (“Nasdaq”) under the ticker symbol “SNSA.” We have voluntarily delisted our ADSs from Nasdaq, effective May 21, 2007, and terminated our American Depositary Receipt program. See “Business—General” and “The Offer and Listing—Markets.”

As of May 21, 2007, 66,133,796 Common Shares and 16,533,449 Founder’s Shares had been issued. Of such shares, 6,633,378 Common Shares and 1,658,344 Founder’s Shares were held by us and therefore considered Treasury shares. Accordingly, as of May 21, 2007, 59,500,418 Common Shares and 14,875,105 Founder’s Shares were outstanding.

BASIS OF PRESENTATION

The consolidated financial statements, including the notes thereto (the “Consolidated Financial Statements”), included or incorporated in this Report have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). Except as otherwise stated, all monetary amounts in this Report are presented in U.S. dollars (“$”). Amounts in other currencies have been translated into U.S. dollars. The translated amounts have been made using rates provided by Bloomberg at the end of each reporting period. For November 30, 2006, the conversion rates are as follows: $1.00 = 6.16 Norwegian kroner (“NOK”); 1.00 British pound (“₤”) = $1.97; 1.00 Euro (“€”) = $1.32; and $1.00 = 115.73 Japanese yen (“Ұ”). For February 28, 2007, the conversion rates are as follows: $1.00 = NOK 6.12 ; ₤1.00 = $1.96; €1.00 = $1.32, and $1.00 = Ұ 120.66.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements included in this Report are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of words like “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should,” “seek,” and similar expressions. We intend that these statements be covered by the safe harbor created under those laws. These statements include, but are not limited to:

· statements in the section entitled “Strategic Outlook” in Item 5 of this Report;

· statements about the factors that affect our financial condition, cash flows and results of operations;

· statements regarding our ability to satisfy our working capital, liquidity and capital expenditure requirements;

· expectations regarding the effects of and our ability to comply with existing and proposed legal and regulatory requirements applicable to us;

· statements regarding our ability to obtain all permits, licenses and certificates necessary to conduct operations;

· expectations regarding developments in, and the outcome of, litigation proceedings and investigations;

· expectations regarding the effects of costs in connection with pending and future legal and regulatory proceedings;

· expectations regarding the construction schedule of SNTG’s terminal operations and ship newbuildings; and

· expectations regarding demand for parcel tankers.

These forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from predicted future results expressed or implied by the forward-looking

statements. Important factors that could cause actual results to differ materially from the information set forth in any forward-looking statements include, but are not limited to:

· the cyclical and volatile nature of our parcel tanker operations, including historically high rates for parcel tanker shipments which may decrease;

· uncertainties inherent in operating internationally, including economic and political instability, boycotts or embargoes, labor unrest, changes in foreign governmental regulations, corruption and currency fluctuations;

· changes in spot rates for bulk liquid transportation services may cause our revenues to fluctuate significantly and impact our contracts of affreightment;

· fluctuations in the cost and availability of raw materials, including bunker fuel;

· changes in, or our failure to comply with, applicable laws and regulations, including our ability to receive or renew applicable permits or licenses;

· the outcome of pending and future legal proceedings involving governmental authorities and third parties, including antitrust proceedings and securities lawsuits;

· the continued availability of certain U.S. tax exemptions;

· the effect of changes in accounting policy;

· the impact of floating interest rates on our debt service costs;

· unforeseen downturns in business and/or other negative events, including negative publicity;

· operating hazards, including marine disasters, oil spills or leaks, adverse weather conditions and other natural conditions such as pollution and disease in the marine environment that may impact our aquaculture business;

· the construction schedule for additional capacity to SNTG’s terminals and ships;

· the effects of disease and other natural conditions on our fish harvests;

· changes in the economic and political policies in China in general, or in the laws and regulations applicable to our business in China;

· the loss of, or deterioration of our relationship with, any significant customers; and

· the effectiveness of our disclosure controls and procedures and internal control over financial reporting.

Many of these factors are beyond our ability to control or predict. Given these uncertainties, readers are cautioned not to place undue reliance on the forward-looking statements contained in this Report, which only apply as of the date of this Report. We do not undertake any obligation to release publicly any revisions of the forward-looking statements to reflect events or circumstances after the date of this Report or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws and regulations.

For additional information on these forward-looking statements and the factors that could cause actual results to differ materially from the expectations contained herein, see Item 3. “Key Information—Risk Factors.”

PART I

Item 1. Identity of Directors, Senior Management and Advisers.

Not applicable.

Item 2. Offer Statistics and Expected Timetable.

Not applicable.

Item 3. Key Information.

Selected Consolidated Financial Data

The selected consolidated financial data as of November 30, 2006 and 2005 and for each of the three years in the period ended November 30, 2006 set forth below has been derived from our audited Consolidated Financial Statements included in Item 18 of this Report. The selected consolidated financial data as of November 30, 2004, 2003 and 2002 and for each of the two years in the period ended November 30, 2003 set forth below has been derived from our audited Consolidated Financial Statements for the respective years, which are not included herein.

The selected consolidated financial data set forth below should be read in conjunction with our Consolidated Financial Statements and Notes thereto, included in Item 18 of this Report.

	For the years ended November 30,
	2006		2005		2004(a)			2003(a)			2002(a)
	($ in millions, except for per share data)
Operating revenue	$	1,576.6	$	1,638.0	$	1,679.3		$	1,544.1		$	1,470.7
Operating income	$	169.2	$	182.4	$	134.6		$	10.7		$	74.4
Income (loss) from continuing operations before cumulative effect of change in accounting principle	$	199.9	$	126.0	$	53.4		$	(50.6	)	$	(8.6	)
Income (loss) from discontinued operations	$	—	$	1.1	$	(1.6	)	$	(265.4	)	$	(94.2	)
Gain on sale of investment in discontinued operations	$	—	$	355.9	$	24.9		$	—		$	—
Net Income (loss)	$	199.9	$	483.0	$	74.9		$	(316.0	)	$	(102.8	)
Income (loss) from continuing operations per Common Share:
Basic	$	3.21	$	1.94	$	0.87		$	(0.92	)	$	(0.16	)
Diluted	$	3.17	$	1.90	$	0.85		$	(0.92	)	$	(0.16	)
Net Income (loss) per share:
Basic	$	3.21	$	7.45	$	1.21		$	(5.75	)	$	(1.87	)
Diluted	$	3.17	$	7.29	$	1.19		$	(5.75	)	$	(1.87	)
Weighted average number of Common Shares and Common Share equivalents outstanding:
Basic	62.2		64.9		61.8			54.9			54.9
Diluted	62.9		66.2		62.6			54.9			54.9
Cash dividends paid per share	$	2.00	$	2.00	$	—		$	0.25		$	0.25

	As of November 30,
	2006		2005		2004		2003		2002
	($ in millions, except per share data)
Total assets	$	2,513.9	$	2,219.2	$	2,432.1	$	2,467.8	$	2,657.3
Long-term debt and capital lease obligations (including current portion)(b)	$	486.2	$	493.6	$	820.4	$	835.2	$	985.1
Shareholders’ equity	$	1,172.6	$	1,213.1	$	883.3	$	694.2	$	989.8
Book value per share	$	19.77	$	18.92	$	13.94	$	12.63	$	18.01
Total number of Common Shares outstanding:	59.3		64.1		63.4		54.9		54.9

(a) All data has been reclassified to reflect SOSA as discontinued operations.

(b) Represents the sum of long-term debt and current maturities of long-term debt on a consolidated basis. See Note 14 to the Consolidated Financial Statements, included in Item 18 of this Report.

Risk Factors

You should carefully consider the following factors and the information contained in this Report, including the information incorporated by reference into this Report. The following is a summary of the risks applicable to our business operations that we consider to be material. Additional risks not presently known to us, or that we currently deem immaterial, may also impair our results of operations or financial condition.

Risks Related to Our Industries and Operations

The parcel tanker industry is cyclical and volatile, which may lead to reductions and volatility in our freight rates, ship values and results of operations.

In 2006, approximately 68% of our consolidated revenue was generated from our parcel tanker operations, consequently, factors that affect the parcel tanker industry will have a significant impact on our overall results of operations, cash flows and financial condition. In the past, the market for parcel tanker services and the prices we have been able to charge have been cyclical and volatile. Fluctuations in the rates we can charge our customers result from changes in the supply and demand for ship capacity and changes in the supply and demand for the products carried, particularly the bulk liquids, chemicals, edible oils, acids and other specialty liquids that form the majority of the products we ship. These factors are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable.

Important factors that influence demand for parcel tankers include:

· supply of and demand for the products we ship;

· the development and location of production facilities for the products we ship;

· the distance products are to be moved by sea;

· global and regional economic and political conditions;

· developments in international trade;

· economic growth throughout the world, and in particular in developing economies such as China, India, the Middle East and the Southeast Asian countries;

· environmental and other regulatory developments; and

· currency exchange rates.

The factors that influence the supply of parcel tankers include:

· the number of new ships being built and the expected delivery of those ships into the international shipping supply;

· the scrapping of older ships;

· the costs of building new ships and drydocking ships for refurbishment or upgrades pursuant to parcel tanker life extensions and repair, including financing costs and steel prices;

· the number of ships, referred to as “swing tonnage”, that are able to carry products in both the clean petroleum, product and parcel trades that may from time to time be deployed in the parcel trade;

· the susceptibility of certain shipyards to rising steel costs which can lead to them experiencing financial problems and difficulty in delivering ships;

· changes in regulations and customer requirements with respect to the maximum age of the ships that may limit the useful life of ships;

· regulations governing ship construction;

· port or canal congestion, including due to security concerns; and

· the availability of shipyards to build parcel tankers when demand is high for the building of other types of ships.

The rates we can charge on our parcel tanker shipments are at historically high levels and may decrease.

Over the last three years, rates for parcel tanker shipments have increased to historically high levels. We anticipate that future demand for our parcel tankers and the rates we can charge will largely depend on continued economic growth in the Asia Pacific region, seasonal and regional changes in demand and changes to the capacity of the world fleet. If growth in parcel tanker capacity outpaces the growth in demand for parcel tankers, it is likely that the rates we can charge will decrease.

An economic slowdown in the Asia Pacific region could have a material adverse effect on our business, financial condition, cash flows and results of operations.

In recent years a significant portion of the growth in our parcel tanker, tank container and terminal businesses has been driven by economic growth in the Asia Pacific region generally, and China in particular. A slowdown in the economies of the U.S., the European Union (“EU”) or certain Asian countries could, among other things, adversely affect economic growth in China and other important markets. Our business, results of operations, cash flows, financial condition and ability to pay dividends would likely be materially and adversely affected by an economic downturn in any of these countries.

Changes in the policies of the government of the People’s Republic of China (“PRC”) could have a significant impact upon the business we may be able to conduct in China and our ability to produce satisfactory returns on our investments in China.

In 2006, our terminal operations entered into three joint ventures in China, to build two chemical and oil products terminals in Tianjin and Ningbo and to establish an ownership interest in jetties in Tianjin. When fully developed, the total cost of these investments to SNTG is currently estimated to be $195 million, $76 million and $24 million, respectively. The development of terminal operations and jetties involves significant up-front investment in infrastructure, and it is typically a number of years before we are able to produce a satisfactory return on such investments. Our other operations in China include a joint venture, Shanghai Sinochem-Stolt Shipping Co. Ltd., with Sinochem Shipping Co., Ltd., established in

2005, to operate chemical tankers in the Chinese coast cabotage market and tank container joint ventures in China.

China’s economy differs from the economies of most developed countries in many respects, including with respect to the level of government involvement, level of development, growth rate, control of foreign exchange, restrictions on foreign investment and allocation of resources. Over the past 25 years, China’s economy has been transitioning from a traditional centrally-planned economy to a more market-oriented economy. China’s reform measures may not always have a positive effect on our operations or investments. Changes in the social, economic and political situation in China and the economic, financial, fiscal and other policies adopted by the Chinese government, especially those tightening restrictions on foreign investment, may affect our operations, performance and profitability. Conducting our business may become more difficult or costly due to changes in policies, laws and regulations, or in their interpretation or the imposition of confiscatory taxation, restrictions on currency conversion, imports or sources of supplies restrictions or prohibitions on dividend payments to stockholders, devaluations of currency or the nationalization or other expropriation of private enterprises. Nationalization or expropriation, in particular, could result in the total loss of our investments in China. In addition, there is no assurance that the Chinese government will continue to pursue economic liberalization and other reforms.

The PRC laws and regulations governing our current business operations and contractual arrangements are uncertain, and if we are found to be in violation, we could be subject to sanctions. In addition, any changes in such PRC laws and regulations may have a material and adverse effect on our business.

The PRC legal system is a civil law system based upon written statutes. Unlike common law systems, prior court decisions may be cited for reference but are not binding on subsequent cases and have limited value as precedents. Since 1979, the PRC legislative bodies have promulgated laws and regulations dealing with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade. However, because the PRC legal system is still evolving, there are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including the laws and regulations governing our business, contractual arrangements with our affiliated entities and the enforcement and performance of our arrangements with customers in the event of the imposition of statutory liens, death, bankruptcy and criminal proceedings. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance by foreign investors. New laws and regulations that affect existing and proposed businesses may also be applied retroactively. In addition, the PRC authorities retain broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business licenses and requiring actions necessary for compliance. In particular, licenses, permits and beneficial treatments issued or granted to us by relevant governmental bodies may be revoked at a later time under contrary findings of higher regulatory bodies. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our businesses. We may be subject to sanctions, including fines, and could be required to restructure our operations. As a result of these substantial uncertainties, there is a risk that we may be found in violation of any current or future PRC laws or regulations and that we will be unable to execute our business strategy in China, any of which could materially harm our business, our financial condition or our results of operations.

Macroeconomic measures taken by the Chinese government could negatively affect our construction costs and business.

While the Chinese economy has experienced rapid growth, such growth has been uneven among various sectors of the economy and in different geographical areas of the country. Rapid economic growth can lead to growth in the money supply and rising inflation. If prices for key raw materials such as stainless steel and concrete rise then the cost of constructing terminals and jetties will also rise. In the absence of a

corresponding increase in storage rates, such increases could have an adverse effect on our expected profitability. In response to concerns that China’s rate of growth in industrial production is unreasonably high which will lead to growing inflationary pressures, the Chinese government has taken a series of measures to slow economic growth. Among the measures that the Chinese government has taken are the increase of interest rates, controls on bank credits, limits on loans for fixed assets, restrictions on state bank lending, and adjustments in tax policy to discourage investments in overheated sectors of the economy. Since October 2004, the People’s Bank of China, China’s central bank, has raised interest rates four times. Repeated increases in interest rates by the central bank will drive up our construction costs. The macroeconmic measures adopted by the Chinese government could contribute to a slowdown in China which could, in turn, have an adverse impact on demand for our services and on our expected returns on our investment in China, particularly as these investments, due to the nature of the terminal and jetty operations we are constructing, are long-term and it is typically a number of years before we are able to produce a satisfactory return on such investments.

The quality of purchased services particularly in the management of certain time chartered ships, could have an adverse impact on the quality of our overall operational performance.

As of April 30, 2007, 41 percent of our parcel tanker fleet (based on dead weight tons (“dwt”)) consisted of short and long-term time chartered ships. Although we prefer to perform the management of these ships, because of both our ship management capacity and market factors, certain ships are managed by third parties. Where we do not perform the ship management, our shipping services may not consistently meet our operational requirements. Our customers do not differentiate between ships we manage and those managed by third parties and therefore do not differentiate in evaluating the performance of all these owned and managed ships. Major failures to meet our customer’s expectations could impact our ability to do business with a number of large customers which could have a negative impact on our net income.

Our inability to hire and retain high quality seafaring personnel could have an adverse impact on the quality of our overall operational performance.

There is presently a shortage of qualified and trained ship officers. As a result, the cost of our seafaring personnel, which accounts for approximately half of total ship owning costs, has increased by approximately 10% annually over the past two years. Future increases are expected to be of the same magnitude or higher. Ship officer selection, training, a competitive remuneration package and promotions are considered essential for our future success. The loss of the services of some of our seafaring personnel or our inability to successfully attract and retain qualified personnel, including ships’ officers, in the future could have a material adverse effect on our business, financial condition and operating results.

The long-term time charter of ships is typically a significant financial commitment and if poorly timed could expose us to losses due to over capacity or over priced capacity.

As of April 30, 2007, 41 percent of our parcel tanker fleet (based on dwt) consisted of short and long term time chartered ships. These time charters represent a significant financial commitment. Fluctuations in charter rates result from changes in the supply and demand for ship capacity and changes in the supply and demand for the major products internationally transported by parcel tankers. The factors affecting the supply and demand for parcel tankers and supply and demand for products shipped in parcel tankers are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable. A downturn in the market could have a negative impact on our net income and cash flow if we have uncompetitively priced ships or the ships are not being utilized.

Continued high prices for ships could have a negative impact on our net income and cash flows.

Based on the size of our Stolt Tankers Joint Service (“STJS”) fleet, we typically need to add an average of two to three ships to our fleet per year to maintain the current fleet size, or to add more ships or increase the size of the ships in order to grow with the market. The cost of building new parcel tankers is currently high, partially because of the high proportion of stainless steel in a parcel tanker and the high price of steel. We believe there is significant demand in the market for many types of newly built ships and that shipyards are generally resistant to building the technically demanding, stainless steel parcel tankers we require as compared to other, simpler ships. We believe such newbuilding prices may decrease when new shipyards in China begin full production and as shipyards complete the high level of new ships currently on order. Consequently, we are balancing the number of new ships to add to our fleet to meet our customers’ future demands with an expectation that the prices for building new parcel tankers will moderate. If, however, the market dynamics do not change or if such newbuilding prices increase further, it will be more costly for us to maintain and increase the size of our fleet. This would have a negative impact on our net income and cash flows.

Changes in “spot rates” can have a significant impact on our revenue, results of operations and cash flows.

Price is an important factor in determining which supplier of transportation services is awarded a contract. Consequently, we may, from time to time, offer space on our ships at prices that do not reflect the relatively high fixed costs of our ships, depending on prevailing contractual rates, the contribution to fixed costs, and whether our revenue exceeds variable costs. Such competitive pricing conditions can occur when the supply of ship transportation services is greater than the demand in the industries for the products we transport and store, including the chemical, lubricant oil, acid and food industries. Supply and demand imbalances are reflected in the “spot” prices for bulk liquid transportation services, which are the prevailing market rate for short-term transportation services at any given time in any particular region. In 2006, 31% of our parcel tanker revenues and substantially all tank container revenues were derived from short-term services at freight rates agreed on the basis of current market levels (“spot rates”). Therefore, supply and demand imbalances that affect spot rates can cause our revenues to fluctuate significantly from quarter to quarter. Most of our parcel tanker revenues are derived from Contracts of Affreightment (“COA”), typically for terms of one year or longer. COA are agreements between the charterer and us to transport an agreed volume of product(s) on agreed trade route(s) during a given period at agreed rates. Changes in the rates for such contracts generally lag spot rate changes, with rates typically adjusting when COA are renewed. Over time, however, changes in spot rates also have an impact on our COA.

The tank container industry is highly fragmented with low barriers to entry, which may lead to consolidation of tank container operators and new competitors.

In 2006, approximately 22% of our consolidated revenue was generated from our tank container operations. Consequently, factors that affect SNSA’s position in the tank container industry may have a significant impact on our overall results of operations, cash flows and financial condition. The tank container industry consists of relatively few global operators with a significant number of small regional operators, leasing companies, and freight forwarders in the industry that could be consolidated into a larger coordinated network. There is also the risk of a large new entrant into the tank container market as the capital required to acquire tank containers is relatively low. Tank containers are shipped globally on container ships. Thus, in addition to other tank container operators we compete with retailers, wholesalers and other producers of consumer goods for space on container ships. These factors are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable.

Important factors that influence demand for tank containers include:

· supply of and demand for the products we or our competitors transport;

· the development and location of production facilities for the products we or our competitors transport;

· global and regional economic and political conditions;

· developments in international trade;

· economic growth throughout the world, and in particular in developing economies such as China, India, the Middle East and the Southeast Asian countries; and

· environmental and other regulatory developments.

The factors that influence the supply of tank containers and their transportation include:

· the number of new tank containers built;

· the number of new container ships being built and the expected delivery of those ships into the international shipping supply;

· the global container ship and tank truck carrying capacity for tank containers; and

· regulations governing the type of products carried on container ships.

Price fluctuations in ship fuel may impact our profitability.

Fuel used by our ships, “bunker fuel”, constitutes one of the major operating costs of our parcel tanker fleet. Fluctuations in the price of bunker fuel can have a material impact on our results. In 2006, with an average cost of approximately $331 per ton, bunker fuel constituted approximately 28% of total fleet operating costs. Our ships use Intermediate Fuel Oil, Marine Diesel Oil and Marine Gas Oil. Approximately 94% of the bunker fuel purchased by us for the STJS is Intermediate Fuel Oil, which is the least expensive of the three types of oil used by oceangoing ships. Since 2000, the average monthly cost of Intermediate Fuel Oil purchased by us has varied between approximately $134 and $462 per ton. The cost in 2006 averaged $313 per ton, or a 26% increase over the 2005 average cost of Intermediate Fuel Oil. For additional information on bunker fuel risk, see Item 11. “Quantitative and Qualitative Disclosures about Market Risk—Bunker Fuel Exposure.”

Although we seek to pass price fluctuations in bunker fuel through to our customers, a significant portion is incurred solely by us and an increase in costs can negatively impact our results. Approximately 69% of our total parcel tanker revenue in 2006 was derived from COA. During 2006, approximately 69% of the revenue earned under COA was under contracts that included provisions intended to pass through to customers fluctuations in fuel prices. The profitability of the remaining 31% of tanker revenue earned under COA was directly impacted by changes in fuel prices.

Our international operations expose us to the risk of fluctuations in currency exchange rates.

Most of SNTG’s operating revenue is earned in U.S. dollars while SSF’s revenue is earned primarily in Euro and, prior to the sale of the Southern bluefin tuna business, Japanese yen. A portion of SNTG’s operating costs is incurred in currencies other than U.S. dollars, in particular the Euro, the Norwegian kroner, the Singapore dollar, and the British pound. Most of SSF’s expenses are in Euro and prior to the sale of the Southern bluefin tuna business, Australian dollars. Where we have a mismatch between revenue and expense currencies, any appreciation of the expense currency relative to the revenue currency will decrease profit margins and could lead to fluctuations in net income.

The revenue and costs of operations and financial position of several of our consolidated subsidiaries are reported initially in non-U.S. dollar functional currencies (which are usually the local currencies of countries in which the subsidiaries reside). The reported information is then translated into U.S. dollars at the applicable exchange rates for inclusion in our consolidated financial statements. For both 2006 and 2005, approximately 6% of SNTG’s consolidated operating revenues were generated in entities with non-U.S. dollar functional currencies. The Euro represented over 97% and 94% of all such SNTG non-U.S. dollar revenues in 2006 and 2005, respectively. The exchange rate between these currencies (the Euro in particular) and the U.S. dollar can fluctuate substantially, which could have a significant translation effect on reported consolidated results of operations and financial position.

Adverse weather and other natural conditions may impact the results of SNTG and SSF.

Inclement weather conditions may impact SNTG’s operational performance. Our ships and tank containers and their cargoes are at risk of being delayed, damaged or lost because of bad weather. Unpredictable weather patterns in winter months tend to disrupt ship and tank container scheduling, impacting productivity and revenue. In addition, the inland barge operations may be negatively impacted by high or low water levels, making river transit more difficult.

While there were no major hurricanes impacting our results in 2006, there is always the possibility of a repetition of the severe hurricanes in the U.S. Gulf coast which occurred during 2005, most prominently Hurricane Katrina in August and Hurricane Rita in September. Our terminal in Braithwaite, Louisiana suffered some structural damages as a result of these storms with several tanks remaining out of service for many months and a resultant loss of earnings. The expenses and losses incurred as a result of Hurricane Katrina are expected to be covered by insurance. However, such coverage may not be adequate to cover all claims and we may not be able to maintain adequate insurance coverage for such operations in the future at an acceptable cost.

SSF may be adversely affected from time to time by climatic conditions, such as severe storms, flooding, dry spells and changes in air and water temperature or salinity, and may be adversely affected by natural or man-made calamities, such as oil spills. Because the growth rates of fish are dependent on weather conditions, unexpectedly hot or cold temperatures may adversely impact growth rates, harm the fish and lead to losses of fish. Bad weather may also delay harvest or result in the loss of equipment or fish. Storms and floods can also cause damage to land based facilities involving an interruption in the water supply or seaweed blockages, which may lead to a loss of fish.

Natural conditions may impact SSF’s business.

SSF may be adversely affected by natural conditions such as pollution, disease, parasites and natural predators, such as sea lions, seals and predatory birds. SSF uses farm management to control the impact of natural predators. If these precautions are not successful, SSF could suffer losses to its fish stock, thereby reducing its revenues and resulting in possible losses. In certain instances, healthy fish may need to be culled, for example, under mandate from government authorities or voluntarily as part of an effort to control disease outbreak in the local farming area. Additionally, new diseases or parasites could emerge in a farming environment for which we do not currently have adequate countermeasures.

Our failure to comply with environmental and other regulations may result in significant fines, penalties, additional expenditures, or the loss of revenue.

We operate in a number of different jurisdictions and are subject to and affected by various types of governmental regulations and standards of industry associations related to the protection of human health and the environment. These include but are not limited to national laws and regulations and international conventions relating to ship safety and design requirements, disposal of hazardous materials related to

normal operations and recycling of ships, discharge of oil or hazardous substances, food safety, marketing restrictions and various import and export requirements. Any changes in government regulation can have a significant impact on our production costs and on our ability to compete effectively in the regulated markets. While we maintain environmental damage and pollution insurance, more stringent environmental regulations may result in significant fines and penalties for non-compliance, and increased costs for, or the lack of availability of, insurance against the risks of environmental damage or pollution. The U.S. Oil Pollution Act of 1990 (“OPA ‘90”) may impose virtually unlimited liability upon ship owners, operators, and certain charterers for certain oil pollution accidents in the U.S., which has made liability insurance more expensive. While we maintain insurance, there can be no assurance that all risks are adequately insured against, particularly in light of the virtually unlimited liability imposed by OPA ‘90, that any particular claim will be paid, or that we will be able to procure adequate insurance coverage at commercially reasonable rates in the future. Because we are insured under mutual insurance companies along with other shipping companies, we are subject to funding requirements and coverage shortfalls in the event claims exceed available funds and reinsurance as well as premiums increase based on prior loss experiences. Any such shortfalls could have a material adverse impact on us.

Discussions are underway within committees of the International Maritime Organization (“IMO”), its national representative bodies and industry working groups regarding the mandatory installation of inert gas generators on new and existing chemical parcel tankers. If legislation is implemented requiring additional equipment, additional costs to comply with the legislation may not be recoverable through higher freight rates.

Our operations involve the use, storage and disposal of chemicals and other hazardous materials and wastes. We are subject to applicable federal, state, local and foreign health, safety and environmental laws relating to the protection of human health and the environment, including those governing discharges of pollutants into the air and water, the generation, management and disposal of hazardous materials and wastes and the cleanup of contaminated sites. In addition, some environmental laws, such as the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”), similar state statutes and common laws, can impose liability for the entire cleanup of contaminated sites or for third-party claims for property damage and personal injury, regardless of whether the current owner or operator owned or operated the site at the time of the release of contaminants or the legality of the original disposal activities.

SSF is subject to the laws and regulations of the individual countries, including the U.S., Spain, Portugal and France, in which their operations are situated, which strictly regulate various aspects of their operations. The hatcheries, on growing sites, and slaughteries are regulated by state environmental laws and laws regarding treatment of, and protection from, fish diseases and pollution. A more strict application of environmental laws may affect SSF turbot operations delaying its new projects and delaying the renewals of its permits on the existing sites.

We are exposed to substantial hazards and risks that are inherent in the industries in which we operate, which may result in loss of revenues, increased expenses, or liabilities which may potentially exceed our insurance coverage and contractual indemnity provisions.

The operations of parcel tankers, tank containers and storage facilities carry an inherent risk of personal injury or death, damage to or loss of property and business interruptions. These risks can arise from, for example:

· marine disasters, such as collisions or other problems involving our ships or other equipment;

· pollution caused by leaks or spills of oils, chemicals or other products transported by our parcel tankers or tank containers or stored at our terminals;

· injuries, death or property damage caused by mechanical failures involving our equipment or human error involving our employees;

· terrorism, war or other hostilities affecting our operations;

· piracy or hijackings involving our ships;

· explosions and fires involving the chemical or other liquid products that we transport or store at our terminals or involving our equipment; and

· other similar circumstances or events.

These risks are exacerbated for us because a significant portion of the cargo we transport and store involves hazardous chemicals. All of the products we carry must be handled with extreme care and require significant expertise. We have obtained customary levels of insurance for liability arising from our operations, including loss of or damage to third-party property, death or injury to employees or third parties and statutory workers’ compensation protection. There can be no assurance, however, that the amount of insurance we carry is sufficient to protect us fully in all events, that any particular claim will be paid or that we will be able to procure adequate insurance coverage at commercially reasonable rates in the future. A successful liability claim for which we are underinsured or uninsured could have a material adverse effect on us. Litigation arising from any such event may result in our being named a defendant in lawsuits asserting large claims. Any such event may result in loss of revenue, increased costs or future increased insurance costs.

While we currently insure our ships against property loss due to a catastrophic marine disaster, mechanical failure or collision, the loss of any ship as a result of such an event could result in a substantial loss of revenues, increased costs and other liabilities in excess of available insurance and could have a material adverse effect on our operating performance.

We spend substantial sums during construction of parcel tankers (“newbuildings”) without earning revenue and without assurance that they will be completed on time or at all.

As of April 30, 2007, we had orders for 29 newbuildings to be owned or operated by SNTG within its wholly owned operations or joint ventures with deliveries scheduled from 2007 to 2012. We may order additional newbuildings in the future. We are typically required to pay substantial sums as progress payments during construction of a newbuilding, but we do not derive any revenue from the ship until after its delivery. While we have refund guarantees from financial institutions with respect to such progress payments in the event the newbuildings are not delivered by the shipyard or accepted by us, there is the potential that we may not be able to collect all or a portion of such refund guarantees, in which case we would lose the amounts of monies we have advanced to the shipyards for such progress payments.

Our receipt of newbuildings could be delayed temporarily or indefinitely because of:

· quality or engineering problems;

· work stoppages or other labor disturbances at the shipyard;

· bankruptcy or other financial crisis of the shipbuilder;

· a backlog of orders at the shipyard;

· our requests for changes to the original ship specifications; or

· shortages of or delays in the receipt of necessary construction materials, such as steel.

If delivery of a ship is materially delayed, it could adversely affect our business, results of operations, cash flows and financial condition.

The aging of our fleet may result in increased operating costs in the future, which could adversely affect our earnings.

In general, the cost of maintaining a ship in good operating condition increases with the age of the ship. As our fleet ages, we will incur increased costs. Older ships are typically less fuel efficient and more costly to maintain than more recently constructed ships due to improvements in engine technology. Cargo insurance rates increase with the age of a ship, making older ships less desirable to charterers. Governmental regulations and safety or other equipment standards related to the age of ships may also require expenditures for alterations, or the addition of new equipment, to our ships and may restrict the type of activities in which our ships may engage. Although our current fleet of 73 ships in the STJS has an average age of 14 years as of April 30, 2007, we cannot assure that, as our ships age, market conditions will justify those expenditures or enable us to operate our ships profitably during the remainder of their useful lives.

Risks Related to Our Company

The U.S. Internal Revenue Service (“IRS”) may assert that our shipping operations do not qualify for exemption from U.S. income taxes.

The profits that our primary operating entity, the Stolt-Nielsen Transportation Group B.V. (“SNTG BV”), derives from the operation of ships in international traffic (“Shipping Income”) are exempt from U.S. federal income taxation pursuant to Article 8 (Shipping and Air Transport) of the December 18, 1992 income tax treaty between the U.S. and the Netherlands, as amended by the protocol of March 8, 2004 (the “Treaty”), as more fully described in Item 5. “Operating and Financial Review and Prospects—Factors Affecting Our Financial Condition and Results of Operations—Financial Matters—U.S. Federal Income Taxation.” We believe that all, or substantially all, of SNTG BV’s profits from the operation of ships in international traffic are properly categorized as Shipping Income. Moreover, as more fully described in Item 5. “Operating and Financial Review and Prospects—Factors Affecting Our Financial Condition and Results of Operations—Financial Matters—U.S. Federal Income Taxation,” we believe that the profits derived by certain ship-owning subsidiaries of SNTG BV from the bareboat rental of their ships are exempt from U.S. federal income taxation pursuant to Article 7 (Business Profits) of the Treaty, provided that such ship-owning subsidiaries do not have a permanent establishment in the U.S. to which such income is attributable. We believe that the ship-owning subsidiaries’ profits from the bareboat rental of their ships are exempt from U.S. federal income taxation, as they do not have a permanent establishment in the U.S. to which such income is attributable.

We believe that, if the income from our shipping operations was not exempt from U.S. federal income taxation under the Treaty, that income, to the extent derived from U.S. sources, generally would be subject to the 4% gross basis tax under section 887 of the Internal Revenue Code of 1986, as amended (the “Code”) regarding certain U.S. source gross transportation income (“USSGTI”). However, if substantially all of the USSGTI derived by SNTG BV is considered to be attributable to regularly scheduled transportation, and if SNTG BV has a fixed place of business in the U.S. involved in the earning of such income, then such income would be taxed on a net basis at graduated U.S. federal corporate income tax rates (currently, a maximum of 35%). SNTG BV also would be subject to a 30% U.S. federal branch profits tax under section 884 of the Code, generally on the after-tax portion of such income that was from U.S. sources each year to the extent that such income was not properly viewed as reinvested and maintained in our U.S. business. Interest paid or accrued by us also could be subject to a 30% withholding tax and/or branch interest taxes under section 884 of the Code (and to some extent could be treated as U.S.-source interest). If the Treaty had not applied to us with respect to our taxable year ended November 30, 2006, we would have been subject to U.S. federal income taxation only on the portion of our income from U.S. sources.

Our tax liabilities could increase as a result of changes in the Luxembourg tax regime.

We are a holding company under the law of July 31, 1929 of Luxembourg (a “1929 Holding Company”) eligible for taxation under the decree of December 17, 1938. On July 18, 2006, the European Commission (“EC”) ruled that the tax regime afforded to Luxembourg’s 1929 Holding Companies constitutes state aid and therefore has to be repealed. On December 29, 2006, Luxembourg abolished the 1929 Holding Company regime but confirmed the retention of the “grandfather” clause maintaining the regime for 1929 Holding Companies existing at July 20, 2006, until December 31, 2010.

In light of these changes to the Luxembourg tax regime, we are evaluating corporate structuring alternatives to maximize the efficiency of our corporate structure and holdings. However, there can be no guarantee that such alternatives will not result in additional costs or taxes to which we are subject currently, and we may not pursue any such alternatives.

Our reputation and our ability to do business may be impaired by corrupt behavior by our employees or agents.

While we are committed to conducting business in a legal and ethical manner, there is a risk that our employees or agents may take actions that violate the U.S. Foreign Corrupt Practices Act, legislation promulgated pursuant to the 1997 Organization for Economic Co-operation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, the International Emergency Economic Powers Act, the Trading With the Enemy Act, the Export Administration Act, including anti-boycott laws, various economic sanctions regulations and export controls that restrict trade with certain designated countries and persons, or other applicable laws and regulations. Such violations could result in monetary or other penalties against us and could damage our reputation and, therefore, our ability to do business.

The Stolt-Nielsen family exercises a controlling influence over matters relating to SNSA requiring shareholder approval.

As of May 21, 2007, the Stolt-Nielsen family, directly and indirectly through Fiducia Ltd., a trust for the benefit of certain members of the Stolt-Nielsen family, controlled 58.2% of the outstanding shares of SNSA entitled to vote generally on matters brought to a vote of shareholders of SNSA. As a result, the Stolt-Nielsen family currently directly and indirectly exercises a controlling influence over SNSA’s operations and has sufficient voting power to control or significantly control the outcome of matters requiring shareholder approval including: the composition of our Board of Directors which has the authority to direct our business and to appoint and remove our officers; approving or rejecting a merger, consolidation or other business combination; raising future capital; and amending our Articles of Incorporation which govern the rights attached to our Common Shares. This control may also make it difficult to take control of SNSA without the approval of the Stolt-Nielsen family. Additionally, the interests of the Stolt-Nielsen family may conflict with the interests of our other investors. For additional information, see Item 7. “Major Shareholders and Related Party Transactions—Major Shareholders.”

It may be difficult to enforce a U.S. judgment against us, our officers and our directors or to assert U.S. securities laws claims in Luxembourg or serve process on our officers or directors.

We are a company organized under the laws of Luxembourg. Most of our directors and officers reside and maintain most of their assets outside the U.S. and it may not be possible to effect service of process within the U.S. on us or on such persons, or to enforce against us or them in U.S. courts judgments obtained in such courts based on the civil liability provisions of the U.S. federal securities laws. We have been advised by Elvinger, Hoss & Prussen, our Luxembourg counsel, that there is substantial doubt as to whether the courts of Luxembourg would (1) enforce judgments of U.S. courts obtained in actions against us or such directors and officers based on the civil liability provisions of the U.S. federal securities laws or (2) entertain original actions brought in Luxembourg against us or such directors and officers predicated

solely upon the civil liability provisions of the U.S. federal securities laws. There is no treaty in effect between the U.S. and Luxembourg providing for such enforcement, and there are grounds upon which Luxembourg courts may choose not to enforce judgments of U.S. courts. Certain remedies available under the U.S. federal securities laws would not be enforced by Luxembourg courts as contrary to that nation’s public policy.

Risks Related to Our Internal Control Environment

Our assessment of our internal control over financial reporting identified two “material weaknesses” and resulted in an attestation with an adverse opinion from our independent registered public accounting firm, which could reduce confidence in our financial statements and negatively affect the price of our securities.

Within this and future annual reports on Form 20-F, we must include an assessment by management of the effectiveness of our internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002 and the rules promulgated by the U.S. Securities and Exchange Commission (“SEC”) to implement Section 404. In addition, our independent registered public accounting firm must attest to and report on management’s assessment of the effectiveness of our internal control over financial reporting. As of November 30, 2006, our Chief Executive Officer and Chief Financial Officer identified two “material weaknesses” in our internal control over financial reporting. As a result, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of November 30, 2006 to achieve their intended objectives, and our independent registered public accounting firm has issued an adverse opinion regarding the adequacy of our internal controls over financial reporting. For more information, see Item 15. “Controls and Procedures.”

We have made changes to our internal controls over financial reporting to address these weaknesses and we expect to continue to make additional changes. However, we cannot be certain that in the future additional material weaknesses will not be discovered or otherwise exist. Furthermore, if we do not effectively address these deficiencies and otherwise continue to improve our internal control over financial reporting, we may be unable to provide timely and accurate financial information and complete our required filings with government authorities, including the SEC, investors could lose confidence in our reported financial information and the trading price of our securities could be adversely affected. We may also be required to incur additional cost in improving our internal control system, which could have an adverse impact on our results of operations.

Risks Related to Our Ongoing Legal Proceedings

We are the subject of parcel tanker investigations by U.S. and European antitrust authorities.

In 2002, we became aware of information that caused us to undertake an internal investigation regarding potential improper collusive behavior in our parcel tanker and intra-Europe inland barge operations. Consequently, we determined to voluntarily report conduct to the Antitrust Division of the U.S. Department of Justice (the “DOJ” or “Antitrust Division”) and the Competition Directorate of the EC. As a result of our voluntary report to the DOJ, we entered into an amnesty agreement, dated January 15, 2003 (the “Amnesty Agreement”) with the Antitrust Division which provided that the Antitrust Division agreed “not to bring any criminal prosecution” against us for any act or offense we may have committed prior to January 15, 2003 in the parcel tanker industry to or from the U.S., subject to the terms and conditions of the Amnesty Agreement, including continued cooperation. The Amnesty Agreement covers SNSA, SNTG and their directors, officers and employees. On February 25, 2003, we announced that we had been conditionally accepted into the DOJ’s Corporate Leniency Program in connection with possible collusion in the parcel tanker industry. We also announced that the EC had admitted us into its Immunity Program with respect to deep-sea parcel tanker and intra-Europe inland barge operations. This program affords us immunity from EC fines with respect to anti-competitive behavior, subject to our fulfilling the conditions of the program, including continuing cooperation. It is

possible that in the future national authorities in Europe, or elsewhere, will assert jurisdiction over the alleged activities.

Subsequent to our announcement of our acceptance into the DOJ’s Corporate Leniency Program, the Antitrust Division’s staff informed us that it was suspending our obligation to cooperate because the Antitrust Division was considering whether or not to remove us from the DOJ’s Corporate Leniency Program. In February 2004, we filed a civil action in the U.S. District Court for the Eastern District of Pennsylvania against the DOJ to enforce our Amnesty Agreement with the Antitrust Division and its ban on criminal prosecution for certain activity that occurred prior to January 15, 2003. In March 2004, the Antitrust Division purported to void the Amnesty Agreement that was the basis for our participation in the DOJ’s Corporate Leniency Program and revoke our conditional acceptance into the DOJ’s Corporate Leniency Program. In January 2005, the District Court entered a judgment in our favor and enforced our Amnesty Agreement, enjoining the Antitrust Division from bringing a criminal prosecution for antitrust conduct in the parcel tanker industry covered under the Amnesty Agreement. The DOJ subsequently appealed the January 14, 2005 District Court order. On March 23, 2006, a two-judge panel of the U.S. Court of Appeals for the Third Circuit reversed and remanded the District Court’s ruling for further proceedings. The panel’s decision did not address the merits of our arguments regarding the effect of the Amnesty Agreement. Instead, the decision was based on the determination that the District Court did not have the authority to issue a pre-indictment injunction, premised on separation of powers grounds. The U.S. Supreme Court declined to consider the Third Circuit’s decision.

On August 23, 2006, the District Court lifted the injunction against our prosecution, and on September 6, 2006, the DOJ filed a one-count criminal indictment against us and two of our executives, Richard B. Wingfield and Samuel A. Cooperman, alleging a violation of Section 1 of the Sherman Antitrust Act. The Antitrust Division’s prosecution is currently proceeding in the U.S. District Court for the Eastern District of Pennsylvania. We are seeking to dismiss the indictment.

If our motion to dismiss the indictment is denied, the criminal prosecution likely would proceed to trial. If we are found guilty, it is possible that we could be subject to substantial and material fines and penalties. The DOJ, in its indictment, alleges that SNSA, SNTG and its alleged co-conspirators derived gross gains, and persons other than the defendants who are co-conspirators suffered gross losses, of at least $100 million. If the DOJ can establish this economic impact, it is possible that the provisions of 18 U.S.C. Section 3571(d) (the Alternative Fines Act) could be invoked in an effort to seek damages that are “double the gain” or “double the loss”. If we were required to pay substantial fines, we cannot assure that we would have sufficient available cash to make such payment. It is possible that our directors, officers or employees could be subject to criminal prosecution, and if found guilty, subject to imprisonment, substantial fines and penalties.

Even if we ultimately prevail on our motion to dismiss the indictment, our continuing immunity and amnesty under the Antitrust Division’s Corporate Leniency Program could potentially require us, our directors, officers and employees to cooperate and otherwise comply with the conditions of the Corporate Leniency Program. It is possible that the Antitrust Division could, once again, determine that we or such directors, officers or employees did not or have not fully complied with those terms and conditions. If this were to happen, we or such directors, officers or employees could, once again, be partly or fully removed from the Corporate Leniency Program, subject to criminal prosecution and, if found guilty, imprisonment, substantial fines and penalties. We could incur significant defense costs and the distraction of senior management from the operation of our business, which could have a material adverse effect on our financial condition, cash flows or results of operations.

The EC’s investigation into the parcel tanker industry has continued. In April 2007, we received the EC’s Statement of Objections regarding allegations of illegal antitrust activity from August 24, 1998 to April 8, 2002. We continue to cooperate with the EC in this matter. We understand that we remain in the

EC’s Immunity Program with respect to the parcel tanker industry. Our continuing immunity and amnesty under the EC’s Immunity Program for the parcel tanker industry depends on the EC’s satisfaction that going forward we are meeting any obligations we may have to cooperate and otherwise comply with the conditions of the immunity and amnesty programs. It is possible that the EC could assert that we have not or are not fully complying with the terms and conditions of the immunity program. If this were to happen, we could be partly or fully removed from the immunity program and subject to substantial and material fines and penalties.

Because of the ongoing litigation with the Antitrust Division with respect to our Amnesty Agreement, the fact-intensive nature of the issues involved, our limited access to the facts in a grand jury investigation, the effect of recent U.S. Supreme Court decisions affecting sentencing, and the inherent difficulty of predicting the outcome of antitrust lawsuits and investigations, we are not able to conclude that an adverse outcome in connection with the criminal investigations is probable or a reasonable range for any such outcome and have made no provisions for any fines related to the DOJ or EC investigations in our consolidated financial statements. Two other targets of the antitrust criminal investigation, Odfjell ASA and Jo Tankers, pleaded guilty to a felony and agreed to pay fines of $42.5 million and $19.5 million, respectively, to resolve the investigation. We have also noted that criminal fines paid in plea agreements in major price-fixing cases over the last decade, have ranged from tens of millions to hundreds of millions of dollars. The range in cases involving other companies and other circumstances is not necessarily indicative of the range of exposure that we would face in the event of an adverse outcome of the DOJ or EC investigations and litigation with the Antitrust Division. An adverse outcome in these proceedings, however, would likely have a material adverse effect on our financial condition, cash flows and results of operations. For additional information on these legal proceedings, see Item 8. “Financial Information—Legal Proceedings.”

We are the subject of a grand jury investigation into our tank container business by U.S. antitrust authorities.

On June 28, 2004, we received a grand jury subpoena from the Antitrust Division calling for the production of documents relating to our tank container business, organized as a separate line of business from our parcel tanker business. We have informed the Antitrust Division that we are committed to cooperating in this matter, and between 2004 and 2006, we have worked to comply with the Staff subpoena and provided documents on a rolling basis to the Antitrust Division. The Antitrust Division has called witnesses from SNTG before the tank containers grand jury in this matter. Because of the confidential nature and the early stage of the proceeding, the unsettled nature of the law involved, the fact-intensive nature of the issues involved, the possible interplay of the tank containers investigation with the pending Amnesty Agreement litigation, and the inherent unpredictability of the outcome of such grand jury proceedings, we cannot predict what the outcome of this proceeding will be and we are unable to estimate a range of possible loss. It is possible that we, our current or former directors, officers or employees could be subject to criminal prosecution and, if found guilty, imprisonment and substantial and material fines and penalties. The effect of an indictment being returned by the grand jury against us or our directors or officers could, by itself, have a significant impact on our reputation and our relations with our employees, vendors, lenders and other constituencies. We have made no provisions for any fines or other penalties related to the Antitrust Division investigation in our Consolidated Financial Statements included in Item 18 below.

We are subject to investigations by jurisdictions other than the U.S. and Europe.

In February 2004, the Canada Competition Bureau (the “CCB”) notified us that it had launched an antitrust investigation of the parcel tanker shipping industry and SNTG. We informed the CCB that we are committed to cooperating fully with the investigation. We do not have amnesty in this investigation but

have continued to cooperate with the CCB. On March 30, 2006, the CCB confirmed that its investigation remains ongoing.

It is possible that regulatory authorities in other jurisdictions could commence or reopen (in the case of the previously concluded investigation by the Korea Fair Trade Commission) investigations or legal proceedings with respect to the activities that are the subject of the investigations. We cannot determine whether or not any such proceedings may be brought or, if they are brought, the potential consequences of such proceedings. It is possible that we could be subject to fines or other civil and criminal penalties. It is also possible that the consequences of such proceedings, if brought, could have a material adverse effect on our financial condition, cash flows or results of operations. For additional information on these legal proceedings, see Item 8. “Financial Information—Legal Proceedings.”

We may be subject to civil liabilities relating to the activities that are the subject of the antitrust investigations.

We continue to be subject to four remaining putative antitrust class actions setting forth almost identical claims of collusion and bid rigging that track information in media reports regarding the DOJ and EC investigations. The suits seek treble damages in unspecified amounts and allege violations of the Sherman Antitrust Act and various state antitrust and unfair trade practices acts. The actions typically name as defendants SNSA and SNTG, along with several of our competitors, including Odfjell, Jo Tankers and Tokyo Marine.

There is also a suit by a bankrupt former competitor, whose allegations generally track the factual allegations in the lawsuits described above, except that the complaint alleges that we conspired with other parcel tanker firms to charge predatory prices, that is, prices that were below a competitive level, thereby driving the former competitor out of business. Additionally, we are in ongoing discussions with several customers regarding the activities that are the subject of the DOJ and EC investigations. Some of these customers have requested mediation of their disputes with us or have threatened to commence litigation. It is possible that other legal proceedings, including arbitration or mediation, will be requested or commenced by our customers or former customers.

We have also been named as a defendant, together with certain of our directors, senior executives and former senior executives, in a purported civil class action for violations of U.S. securities laws. The securities litigation also appears to be based on media reports about the DOJ and EC investigations and alleges, among other things, that our failure to disclose such alleged antitrust violations, and other allegedly false and misleading statements, caused plaintiffs to pay inflated prices for our shares. The securities litigation seeks unspecified monetary damages, among other things.

We may be required to make payments in settlement or as a result of a final judgment to entities that have commenced or may commence proceedings against us in amounts that are not determinable. The existence of these proceedings also could have a material adverse effect on our ability to access the capital markets to raise additional funds to refinance indebtedness or for other purposes. Therefore, the pending civil claims against us and any future claims could have a material adverse impact on our financial condition, cash flows or results of operations. For additional information on these legal proceedings, see Item 8. “Financial Information—Legal Proceedings.”

In light of the early stage of these litigations and arbitrations, the fact-intensive nature of the issues involved, the inherent uncertainty of litigation and arbitration, the unsettled law and the potential offsetting effect of counterclaims asserted against the claimants, we are not able to determine whether or not a negative outcome in any of these actions is probable, or a reasonable range for any such outcome, and have made no provisions for the claims raised in these proceedings in our consolidated financial statements. Given the volume of commerce involved in our parcel tanker business, an adverse ruling in one or more of these civil antitrust proceedings could subject us to substantial civil damages given the treble damages provisions of the Sherman Antitrust Act. We have noted that the civil damages in major civil

antitrust proceedings in the last decade have ranged as high as hundreds of millions of dollars, including where companies have entered into the DOJ’s Corporate Leniency Program. This range involving other companies and other circumstances is not necessarily indicative of the range of exposures that we would face in the event of an adverse outcome, although it is possible that the outcomes of any or all of these proceedings could have a material adverse effect on our financial condition, cash flows and results of operations.

We are the subject of an informal inquiry by the U.S. Securities and Exchange Commission.

On July 12, 2006, we received notice of an informal inquiry by the SEC. The inquiry requests documents and information relating to the material weaknesses in internal financial controls disclosed in our Annual Report on Form 20-F for the fiscal year ended November 30, 2005, including our stock option grants and practices, and communications with antitrust regulators in the U.S. and Europe. We are cooperating with the SEC and continue to provide responsive documents. The SEC’s inquiry is still ongoing. As we are unable to predict the outcome of SEC inquiries, we are unable to determine whether or not an unfavorable outcome is probable, and we are unable to estimate a range of possible loss and we have made no provisions for any fines related to the inquiry in our consolidated financial statements. It is possible that this inquiry could lead to a formal investigation, the outcome of which could result in substantial and material fines and penalties. Consequently, the outcome of the SEC’s inquiry could have a material adverse effect on our financial condition, cash flows and results of operations.

We have incurred significant costs and may be required to make significant payments to customers in connection with antitrust-related proceedings.

In connection with the antitrust-related investigations and legal proceedings, we have incurred significant legal fees and costs. We have incurred legal fees and costs for antitrust-related investigations and legal proceedings of $42.0 million in 2006, $30.2 million in 2005 and $20.1 million in 2004, which are included in “Administrative and general expenses” in the consolidated statements of operations. We expect that we will continue to incur significant fees and costs until these matters are resolved. Due to the uncertainty over the resolution of the matters described in Item 8. “Financial Information—Legal Proceedings,” we have not established any reserves for legal fees and costs related to such proceedings.

We have actively engaged in discussions with a number of our customers regarding the subject matter of the DOJ and EC investigations. We have reached agreements or agreements in principle resolving the existing and potential antitrust claims with a significant number of our major customers, with the condition that the customer relinquishes all claims arising out of the matters that are the subject of the antitrust investigations. In some cases, we have agreed to future discounts, referred to as rebates, which are subject to a maximum cap and are tied to continuing or additional business with the customer. The potential future rebates, which we do not guarantee, are not charged against operating revenue unless they are in consideration for settlement of existing or potential antitrust claims or the rebate is earned. The aggregate amount of such future non-guaranteed rebates for which we could be responsible under existing settlement agreements, agreements in principle and offers made and not recognized is approximately $6 million as of February 28, 2007. We expect that most of the operating revenue that would be subject to these rebates will occur within the 9 months subsequent to November 30, 2006. In certain cases, we also have agreed to make up-front cash payments or guaranteed payments to customers, often in conjunction with rebates. We have made provisions against operating revenue totaling $21.9 million and $39.1 million in 2006 and 2005, respectively, reflecting such payment terms of existing settlement agreements or agreements in principle or offers made to customers. It is possible that we will be required to enter into similar arrangements to settle other existing and potential antitrust claims.

Continuing negative publicity may adversely affect our business.

We have been the subject of substantial negative publicity relating to the antitrust investigations and related civil litigation and regulatory inquiries, including the employment litigation commenced by a former internal legal counsel. We may experience reluctance on the part of certain customers and suppliers to continue working with us on customary terms. The negative publicity, legal proceedings and resulting impact on our businesses could also have a negative impact on our ability to refinance our existing indebtedness when necessary. As a result of the antitrust investigations, the related litigation and negative publicity, members of senior management must spend significant management time and effort dealing with investigations, litigation and customer relations issues rather than the operation of our businesses. Moreover, the negative publicity could encourage increased scrutiny from governmental regulatory authorities relevant to our various businesses or make us a more attractive subject for third-party claims and disputes. Whether or not warranted, such negative attention could require us to incur additional costs to respond to or settle such matters or have a negative impact on our share price. Therefore, continuing negative publicity could have a material adverse effect on our results of operations and liquidity and the market price of our publicly traded securities.

Item 4. Information on the Company.

History and Development of the Company

Stolt-Nielsen S.A. was incorporated in Luxembourg in 1974 as the holding company for all of our activities. Our registered office is located at 23, avenue Monterey, L-2086 Luxembourg, and we are registered at the Companies’ Register of the Luxembourg District Court under the designation R.C.S Luxembourg B.12.179. Our principal executive office is c/o Stolt-Nielsen Limited, Aldwych House, 71-91 Aldwych, London WC2B 4HN, U.K. Our telephone number is +44(0)20-7611-8960 and our internet address is www.stolt-nielsen.com. Our agent for U.S. federal securities law purposes is Stolt-Nielsen Inc., 800 Connecticut Avenue, 4th Floor East, Norwalk, Connecticut, 06854, U.S. The information on our website is not part of this Report.

We have 27 offices and employ 5,226 persons worldwide as of April 30, 2007.

General

We are a Luxembourg company and through our subsidiaries are currently engaged in two businesses: Transportation and Seafood.

The Transportation business includes parcel tankers, tank containers and terminals divisions. The Transportation business, which is carried out through SNTG, is engaged in the worldwide transportation, storage, and distribution of bulk liquid chemicals, edible oils, acids, and other specialty liquids.

The Seafood business, which is carried out through SSF, produces, processes and markets turbot, sturgeon caviar and sole. On April 29, 2005, we completed a joint venture between SSF and Nutreco called Marine Harvest, to establish a fish farming, processing and sales business. During fiscal year 2006 and most of fiscal year 2005, we owned 25% of the shares of Marine Harvest and Nutreco owned the remaining 75%. On March 6, 2006, we announced the sale of our entire 25% ownership interest in Marine Harvest. The transfer of ownership, which remained subject to approvals from regulatory and competition authorities, was completed on December 29, 2006. We did not contribute SSF’s turbot and sole operations in Europe and Southern bluefin tuna operations in Australia to Marine Harvest. Consequently, these businesses comprised SSF’s operations during fiscal year 2006. However, on December 18, 2006, we sold SSF’s Southern bluefin tuna business. Additionally, on December 22, 2006, we announced the completion of reacquisition from Marine Harvest of a 75% equity interest in its sturgeon and caviar business, Sterling

Caviar LLC for $5.1 million. Consequently, SSF’s ongoing operations in fiscal 2007 are comprised of its turbot and sole operations in Europe and its sturgeon and caviar business.

Until January 13, 2005, we also had an ownership interest in SOSA, an offshore contracting business. We owned a 41.7% economic and voting interest in SOSA as of November 30, 2004. In 2004, we reduced our economic and voting interest in SOSA and deconsolidated the activities of SOSA in our financial reports as we no longer had a controlling interest. On January 13, 2005, we sold all of our remaining ownership interest in SOSA.

Recent Significant Developments

Since the end of fiscal year 2006, we have taken a number of significant actions impacting our business, including the following:

· On December 6, 2006, we paid an interim dividend of $0.50 per Common Share (including American Depositary Shares, each of which represents one Common Share) to shareholders of record as of November 20, 2006.

· On December 18, 2006, we announced the sale of SSF’s Southern bluefin tuna business, based in Port Lincoln, Australia, to SAMS Holdings (SA) Pty. Ltd. for proceeds totaling AUS $90.0 million (U.S. $70.0 million at the then current exchange rates). We recognized a gain of $44.3 million on the transaction in the first quarter of 2007.

· On December 21, 2006, we announced that a subsidiary of SNTG signed a joint venture agreement with CITIC Daxie Development Co. in Ningbo, China to establish a joint venture to design, construct, own and operate a new chemical and oil products terminal on Daxie Island. The initial phase of development is anticipated to include the construction of 23 storage tanks, with a total capacity of 204,000 cubic meters at a total estimated investment of $44 million. SNTG’s share of the initial investment is $22 million.

· On December 22, 2006, we announced the completion of the acquisition from Marine Harvest of a 75% equity interest in its sturgeon and caviar business, Sterling Caviar LLC, for a total purchase price of $3.8 million and the assumption of loans of $1.3 million, which represented the existing book value of the operations at the time of the acquisition.

· On December 29, 2006, we announced we had completed the sale of our 25% shareholding in Marine Harvest to Geveran Trading Co. Ltd. (which in turn contributed the business to Pan Fish ASA) after receiving the required approvals from U.K. and French competition authorities. We recorded a gain of $21.8 million on this transaction in the first quarter of 2007 based upon the value of our investment in Marine Harvest.

· On December 29, 2006, our 50% owned joint venture NYK Stolt Shipholding Inc. exercised options for two 12,500 dwt ships to be constructed at the Usuki Shipyard Co. Ltd. in Japan. The cost of each ship is approximately $30 million and delivery is expected in 2011.

· Subsequent to November 30, 2006, we ordered 800 tank containers from China Industrial Manufacturing Company for $21.5 million.

· In January 2007, we sold the barges Stolt Koeln and the Stolt Emden for a total of $3.5 million.

· In March 2007, we purchased the Multitank Iberia for $14.9 million. The Multitank Iberia, which has been renamed the Stolt Razorbill, is a double hull, 5,797 dwt parcel tanker built in 1995 and will be used in SNTG’s inter-European service.

· On April 10, 2007 we exercised our options for four 43,000 dwt parcel tankers from SLS Shipbuilding Co. Ltd (“SLS”). The aggregate price for the four ships is expected to be approximately $338 million and delivery is expected in 2011 and 2012.

· On April 19, 2007, we announced our intention to voluntarily delist from the Nasdaq Global Select Market, which was effective as of the close of trading on May 21, 2007, and to terminate our American Depositary Receipt program.

Business Overview

Stolt-Nielsen Transportation Group

Our transportation business is carried out through SNTG, which represented approximately 96% of our 2006 operating revenue, and approximately 85% of our total assets as of November 30, 2006.

SNTG is engaged in the worldwide transportation, storage and distribution of bulk liquid chemicals, edible oils, acid and other specialty liquids. SNTG is able to offer its customers a range of transportation and storage solutions on a worldwide basis through its intercontinental parcel tanker, coastal parcel tanker, river parcel tanker, tank container, terminal and rail services.

As of April 30, 2007, based on the size of the fleet, SNTG is one of the largest operators of parcel tankers in the world, and, based on the number of tank containers, is the largest operator in the tank container market. Parcel tankers and tank containers carry similar products, with parcel tankers typically used to transport cargo lots greater than 150 metric tons, while tank containers are typically more economical for transportation of smaller cargo lots.

Tankers

SNTG has been a pioneer in the parcel tanker industry, an industry which derives its name from our first operating company, Parcel Tankers Inc., which was incorporated in Liberia in 1959. Parcel Tankers Inc. subsequently changed its name to Stolt-Nielsen Transportation Group Ltd. As of April 30, 2007, SNTG had a fleet of 157 parcel tankers, product tankers, river tankers, and barges ranging in size from approximately 1,200 to 40,160 dwt of which 80 parcel tankers were over 10,000 dwt, and with total capacity of approximately 2.5 million dwt. Of the 157 parcel tankers, 73 ships provide intercontinental service, 43 ships provide regional service and 41 ships provide inland or river service. Of the 157 parcel tankers, we own 67 ships, we have an interest in 18 ships via several joint ventures and we time charter, either directly or indirectly, 72 ships.

The parcel tanker industry occupies a market niche in the worldwide tanker trade and represents only about 6% of the dwt of the international tanker fleet. Unlike crude oil tankers which generally load a full cargo at one port for one customer and discharge at one destination, parcel tankers, as the name implies, carry many cargoes (as many as 58 parcels) for many customers on the same voyage and load and discharge cargo at many ports. A parcel tanker may carry a wide range of bulk liquids shipped in parcels of several hundred to several thousand tons each.

To facilitate handling of the diverse range of products carried by parcel tankers, our fleet is comprised of highly specialized ships. SNTG’s sophisticated intercontinental parcel tankers typically have 40 to

58 separate cargo tanks of varying sizes to permit the carriage of up to that number of fully segregated cargoes. The tanks are made of stainless steel or specially coated or lined steel to maintain the integrity of the variety of chemicals and other products carried and to facilitate cleaning. In addition, many tanks have independent heating and cooling systems to provide temperature control for each cargo. The level of sophistication of parcel tankers is reflected in newbuilding costs that are substantially higher than those for equivalently sized product tankers.

SNTG’s parcel tanker fleet covers nearly all of the major international trade routes served by the industry. SNTG operates its ships on round-trip voyages with cargo carried on both outbound and inbound legs. These trade routes maximize utilization of ships which seldom sail without cargo.

SNTG operates its major intercontinental services through the STJS, a contractual arrangement managed by SNTG for the coordinated marketing, operation, and administration of the fleet of parcel tankers owned or chartered by the STJS participants in the deep-sea intercontinental market. We make the daily operating decisions of the STJS and provide such services as entering into COA with customers, making pricing decisions, directing the STJS ships’ voyages, collecting receivables and paying voyage operating expenses, all on behalf of the STJS. SNTG is primarily responsible for the fulfillment of the services contracted on behalf of STJS. The STJS ships are marketed by SNTG’s professional chartering personnel worldwide using proprietary marketing and cargo tracking information systems as part of SNTG’s worldwide network of chemical transportation and distribution services. Stolt-Nielsen Transportation Group B.V., a company incorporated in The Netherlands and wholly owned by us, manages the STJS.

The STJS participants include affiliates and non-affiliates of SNSA. As of April 30, 2007, this fleet was comprised of 73 parcel tankers totaling approximately 2.2 million dwt. Of these, SNTG directly owns and operates 41 ships and time-charters eleven ships for participation in the STJS. The STJS collectively operates six ships owned by NYK Stolt Tankers, S.A. (“NYK Stolt,” 50%-owned by SNTG), three ships owned by Bibby Pool Partners Limited and three ships owned by Unicorn Lines (Pty) Limited. The STJS currently has 9 additional tankers on time-charter.

Each ship in the STJS is assigned an earnings factor based upon its cargo carrying capacity and technical capabilities. The profitability of each ship is determined by its share of the STJS results, and not by the specific voyages performed. This enables the management of the STJS to schedule the fleet to optimize its total results.

SNTG also operates tankers in five regional markets, two of which are in conjunction with joint venture partners. The Stolt NYK Asia Pacific Services Inc. (“SNAPS”) joint venture operates in the East Asia and Southeast Asia areas, with the tankers marketed by SNTG’s offices in these areas. The Stolt-Nielsen Inter-Europe Service (“SNIES”) operates small tankers in European coastal waters while Stolt-Nielsen Inter-Asia Service operates small tankers in East Asian coastal waters. The Stolt-Nielsen Inland Tanker Service currently operates 41 inland tankers on the Northwest European waterways while Stolt Transportation Services trades five inland barges in U.S. coastal waters.

In 2005, SNTG established a joint venture, Shanghai Sinochem-Stolt Shipping Co. Ltd., with Sinochem Shipping Co., Ltd to operate chemical tankers in the Chinese coast cabotage market. The joint venture received its operating license from the China Ministry of Communication and has secured three strategic contracts with multinational chemical companies in China. As of April 30, 2007, the joint venture is operating six ships, which includes four newbuildings from a Chinese shipyard delivered in August 2006, December 2006, January 2007 and March 2007, respectively. SNTG’s share of the joint venture is 49%.

We have entered into several commitments for the building of new ships at various shipyards. The following table summarizes newbuildings that will be either owned or operated by SNTG within its wholly owned operations or joint ventures. See the notes to the table below pertaining to ownership.

Name of Ship

Delivery Date

DWT

Shipyard

Ownership

Purchase Price

(metric tons)

(In Millions of $)

STOLT TANKERS JOINT SERVICE

Hull No. 473

May 2008

44,000

SLS

SNTG BV

57.5

Hull No. 474

September 2008

44,000

SLS

SNTG BV

57.5

Hull No. 475

November 2008

44,000

SLS

SNTG BV

57.5

Hull No. 476

February 2009

44,000

SLS

SNTG BV

57.5

Hull No. 488

June 2009

44,000

SLS

Gulf Navigation

(a)

Hull No. 489

August 2009

44,000

SLS

Gulf Navigation

(a)

Hull No. 504

May 2010

43,000

SLS

SNTG BV

84.5

Hull No. 505

August 2010

43,000

SLS

SNTG BV

84.5

Hull No. 506

November 2010

43,000

SLS

SNTG BV

84.5

Hull No. 507

February 2011

43,000

SLS

SNTG BV

84.5

Hull No. 508

May 2011

43,000

SLS

SNTG BV

84.5

Hull No. 509

August 2011

43,000

SLS

SNTG BV

84.5

Hull No. 510

November 2011

43,000

SLS

SNTG BV

84.5

Hull No. 511

February 2012

43,000

SLS

SNTG BV

84.5

Hull No. 149

September 2007

43,000

Aker Yards

SNTG BV

80.6

Hull No. 150

March 2008

43,000

Aker Yards

SNTG BV

80.6

Hull No. 151

September 2008

43,000

Aker Yards

SNTG BV

88.1

Hull No. 152

March 2009

43,000

Aker Yards

SNTG BV

88.3

Hull No. 153

August 2009

43,000

Aker Yards

SNTG BV

87.6

Hull No. 154

December 2009

43,000

Aker Yards

SNTG BV

86.9

Stolt Pondo

December 2007

33,000

Kitanihon

T/C by Unicorn

(a)

Unicorn

June 2011

25,000

Kitanihon

T/C by Unicorn

(a)

Orix Stolt

June 2008

19,900

Kurushima

T/C by SNTGBV

(a)

TOTAL FOR STJS (23 ships)

943,900

1,418.1

STOLT-NIELSEN ASIA PACIFIC SERVICE

Hull No. 1721

June 2010

12,500

Usuki

NSSH

32.0

Hull No. 1722

June 2010

12,500

Usuki

NSSH

32.0

Hull No. 3

June 2011

12,500

Usuki

NSSH

30.3

Hull No. 4

June 2011

12,500

Usuki

NSSH

30.3

TOTAL FOR SNAPS (4 ships)

50,000

124.6

SHANGHAI SINOCHEM-STOLT SHIPPING

Xingle 3

July 2007

3,697

Xingle

SSMS

7.8

Xingle 4

November 2007

3,697

Xingle

SSMS

7.8

TOTAL FOR SHANGHAI SINOCHEM-STOLT SHIPPING (2 ships)

7,394

15.6

TOTAL NEWBUILDINGS (29 ships)

1,001,294

1,558.3

Notes:

(a) Prices shown only for owned and joint venture-owned ships.

“SNTG BV” means Stolt-Nielsen Transportation Group B.V., a wholly owned subsidiary of SNSA.

“Gulf Navigation” means Gulf Navigation Company LLC of the United Arab Emirates.

“NSSH” means NYK Stolt Shipholding Inc., which is 50% owned by us.

“T/C” means time-chartered which is where a ship is hired for a certain period of time and the hire includes the crew and technical management of the ship.

“Unicorn” means Unicorn Lines (Pty) Limited.

“SSMS” means Stoltchem Ship Management (Shanghai) Ltd., which is 49% owned by us.

“SLS” means SLS Shipbuilding Co. Ltd.

“Aker Yards” means Aker Yards ASA.

“Kitanihon” means Kitanihon Shipbuilding Co. Ltd.

“Kurushima” means Shin Kurushima Dockyard Co. Ltd.

“Usuki” means Usuki Shipyard Co. Ltd.

“Xingle” means Ningbo Xingle Shipyard

We have also acquired ships in the open market.

· On January 3, 2006, we purchased the Turchese which we renamed Stolt Frigate. The purchase price of this all stainless steel 6,155 dwt ship built in 1988 was approximately $9 million.

· On May 19, 2006, we announced that SNTG had acquired two parcel tankers, each approximately 8,600 dwt, to meet growing customer demand in SNTG’s inter-European service. The sister ships Bow Wave and Bow Wind were purchased for $18.5 million each and were renamed Stolt Skua and Stolt Teal, respectively. We took delivery of the ships on September 12, 2006 and November 6, 2006, respectively.

· On February 22, 2006, we announced that SNTG would exercise an option to acquire three product/chemical tankers that had been on bareboat charter, for a total cost of $40.7 million. Between March 28, 2006 and March 31, 2006 we took over the ownership of the three ships named Stolt Peak (formerly named the Montana Blue), Stolt Hill (formerly named the Montana Star) and Stolt Mountain (formerly named the Montana Sun). The three ships are being converted to double hull at an estimated total cost of $7.5 million to meet MARPOL Annex II regulations that took effect on January 1, 2007. The conversion for the Stolt Peak was completed on January 7, 2007. We expect the conversion of the other two ships to be completed in 2007.

· In March 2007 we entered into an agreement to purchase the Multitank Iberia for $14.9 million. The Multitank Iberia is a double hull, 5,797 dwt parcel tanker built in 1995 and will also be used in our inter-European service.

· On April 10, 2007 we exercised our options for four 43,000 dwt parcel tankers from SLS. The aggregate price for the four ships is expected to be approximately $338 million and delivery is expected in 2011 and 2012.

· On April 11, 2006, SNTG announced that it had entered a strategic partnership with Gulf Navigation Company LLC of the United Arab Emirates. Gulf Navigation agreed to acquire two 44,000 dwt parcel tankers from SLS, in place of an option held by SNTG. Upon entering service in mid-2009, the ships will join the STJS fleet.

We, through SNTG, manage all of our owned ships and we employ our own seafarers. For our shipowning activities we have secured International Ship Management Association Quality Assurance System certification, which is an optional industry driven quality program. In addition we have International Standards Organization (“ISO”) 9002 and International Safety Management (“ISM”) certifications. ISO is not industry specific and is also an optional quality standard with which we comply.

ISM is a regulatory requirement governed by the IMO. We have a complete quality assurance system to confirm that all of our operations are performed to a uniformly high standard and are properly documented.

SNTG personnel coordinate most of the marketing and sales efforts directly with SNTG’s parcel tanker customers. In some markets third-party brokers support this effort.

SNTG’s tanker operations make extensive use of information systems for estimating voyages, scheduling cargo, stowing cargo, billing customers, tracking product handling and cleaning requirements, and managing ships. These systems not only control and track the status of each cargo movement but also keep the customer informed through system-generated, estimated time of arrival notices. SNTG’s Cargo STOW (Stolt Tankers Operators Workstation) system, our proprietary software used to efficiently plan the loading of our parcel tankers and to verify that the varied and often hazardous products are carried in the appropriate cargo tanks, has won a Windows World Open award for best Microsoft Windows system for distribution companies.

Tank Containers

The emergence of tank containers as a means of transporting bulk liquids such as chemicals and oils dates back to the early 1970s. Tank containers are stainless steel cylindrical tanks enclosed in rectangular steel frames, with the same outside dimensions as 20 foot dry box containers. They carry 17,000 to 26,000 liters of bulk liquids (16 to 24 tons, depending upon the specific gravity of the product). This compares to the smallest compartment in a parcel tanker which can carry approximately 100,000 liters of bulk liquid. Tank containers can be transported on container ships, rail cars, and trucks.

SNTG entered the tank container business in 1982 when it acquired United Tank Containers, which at the time operated about 400 tank containers. As the market grew, SNTG steadily expanded its tank container fleet through the purchase or lease of newly manufactured tank containers and through acquisitions. SNTG specializes in making all transportation arrangements from origin to destination on behalf of the shipper, which is known as “door-to-door” shipping. As of April 30, 2007, SNTG operated a fleet of 19,870 tank containers.

In November 2004, SNTG established a joint venture in China, Shanghai Stolt-Kingman Tank Containers Transportation Ltd, with Shanghai Kingman Container Service Company Limited. SNTG has an 80% interest in the company which was established to provide integrated, multi-modal tank container services to China’s bulk liquid chemical and food industries. In June 2005, SNTG acquired Ermefer, the food-grade container business of Group Ermewa S.A., a global provider of logistics services. This transaction added nearly 300 leased tanks to the food grade sector of the tank container division. In late 2005 and throughout 2006, SNTG added an additional 980 new units to its fleet by the purchase of newly built tank containers from the China Industrial Manufacturing Company.

All of SNTG’s tank containers are built and maintained to the standards of the IMO, the ISO, the U.S. Department of Transportation and other relevant governmental and private organizations. SNTG requires that all of its tank containers be constructed according to, and have valid certificates in accordance with, the International Convention for Safe Containers (“CSC”). SNTG conducts periodic inspections in conformity with CSC and IMO testing requirements to ensure compliance with those safety and trading requirements.

Our tank container operations require infrastructure for tank cleaning and repair. In Europe and the U.S., third-party contractors primarily perform this work. In Rotterdam, Houston, and the Asia Pacific region, we have established our own facilities to ensure high standards of quality, reduce costs, and increase market penetration by facilitating the ready supply of containers. The facilities in Japan and Korea are operated through joint ventures. In October 2006 we opened a newly-built, wholly-owned tank

cleaning and repair facility in Shanghai, China operating under the name Shanghai Stolt Container Terminal Ltd.

SNTG’s tank container operations have received ISO 9001:2000 certification which is a framework for quality management and quality assurance. SNTG’s Move/Quote System is used by the tank container personnel on a worldwide basis to schedule, track, trace and bill for tank container movements.

Terminals

SNTG owns or has investments in six bulk liquid storage terminals. SNTG’s terminals offer bulk liquid storage and handling services and are distribution centers for the transfer of products between various modes of transportation, including ships, rail, barge and tank trucks. SNTG currently owns and operates two tank storage terminals in the U.S. in Braithwaite, Louisiana and Houston, Texas, and one in Santos, Brazil, with a combined capacity of approximately 4.6 million barrels of liquid storage as of April 30, 2007. Each of these terminals serves as a central location for the storage and distribution of liquid chemicals, vegetable oils, and other products, providing utilities and storage and handling services to customers of SNTG’s parcel tankers as well as for third parties.

SNTG’s terminal operations also have interests in three operational joint ventures, with a combined storage capacity of 7.0 million barrels as of April 30, 2007: (i) a 49% interest in Stolthaven Westport Sdn. Bhd, which has a terminal facility in Malaysia, (ii) a 50% interest in Jeong-IL Stolthaven Ulsan Co. Ltd. which has a terminal facility in Ulsan, South Korea and (iii) a 50% interest in Oiltanking Stolthaven Antwerp N.V., a terminal storage company in Antwerp, Belgium. SNTG also has an arrangement with subsidiaries of the global storage company Koninklijke Vopak N.V. (“Vopak”) pursuant to which we have preferential rights for SNTG ships to berth at two terminals located in Rotterdam, which is SNTG’s parcel tanker operations’ most frequently called port. This berthing arrangement saves SNTG time and, therefore, improves the efficiency of ship operations.

On July 21, 2006, a wholly-owned subsidiary of SNTG, entered into the Oiltanking Stolthaven Antwerp N.V. joint venture with Oiltanking GmbH. The terminal, which was formerly wholly-owned by a subsidiary of Oiltanking GmbH, is situated in the Port of Antwerp, Belgium and has a capacity of 3.1 million barrels of liquid storage serving the liquid chemical, gas and petroleum markets. The joint venture agreement also contemplates the completion of a new finger pier and commitments have been approved for an additional 2.2 million barrels of capacity to be completed between 2007 and 2009. The total cost of these commitments by the joint venture company is approximately $108 million.

On June 12, 2006, SNTG announced the signing of two joint venture agreements with the Lingang Harbor Affairs Company for the long-term lease of waterfront property in Tianjin, China upon which a new chemical and oil products terminal is to be designed and built by SNTG. The terms of the joint venture agreements establish two joint venture companies, one that owns the terminal for bulk-liquid storage and one that owns the jetty and dock facilities. SNTG owns 65% of the Tianjin Stolthaven Terminal Co. Ltd. and 40% of the Tianjin Stolthaven Jetty Co. Ltd. The business licenses and certificates of approval for the joint ventures were received on January 11, 2007 and December 6, 2006, respectively. The initial phase of the terminal development is anticipated to include the construction of 47 storage tanks, with a total capacity of 1.1 million barrels, and a jetty at a total estimated investment of $58 million. The development is anticipated to require a $23 million investment from SNTG. The terminal’s first jetty became operational in November 2006 and is anticipated to be contributed to the joint venture in 2007 while the terminal is planned to be operational in the first quarter of 2008. The jetty is used as a lay-by berth for cleaning, loading stores and board-to-board operations.

On December 21, 2006, SNTG announced the signing of an agreement with CITIC Daxie Development Co. in Ningbo, China to establish a joint venture to design, construct, own and operate a state-of-the-art chemical and oil products terminal on Daxie Island. Each party owns 50% of the newly

formed joint venture company, Stolthaven Ningbo, Ltd. The business license and certificate of approval for the joint venture were received on January 29, 2007. The initial phase of development is anticipated to include the construction of 23 storage tanks, with a total capacity of 1.2 million barrels at a total estimated investment of $44 million. Our share of the initial investment is $22 million. We expect the terminal to be operational in 2008.

The following table contains information on SNTG’s terminals as of April 30, 2007:

Storage Location	% Holding		Year Acquired		Capacity (barrels)
Houston	100	%	1982	*	2,547,300
Braithwaite	100	%	2001		1,426,258
Santos	100	%	1982		648,008
Subtotal					4,621,566
Joint Ventures
Westport, Malaysia	49	%	1998		645,335
Ulsan, South Korea	50	%	1999		3,308,440
Antwerp, Belgium	50	%	2006		3,063,327
Subtotal					7,017,102
Total					11,638,668

* Until 1988 the Houston terminal was operated via a joint venture.

SNTG currently holds the ISO 9002 certification for our terminal business systems in Houston, Braithwaite and Santos. SNTG implemented a Terminal Automation System for tracking customer contracts and tank inventory, as well as for producing customer bills and reports. SNTG terminals also received security certification in 2004 as required by IMO with the certification being handled by regulatory authorities in each country where the terminals are located.

As of April 30, 2007, SNTG also operates a fleet of 520 leased railroad tank cars consisting of general-purpose low-pressure and specialized high-pressure tank cars.

Stolt Sea Farm

SSF is involved in the aquaculture industry. Aquaculture is the controlled breeding, growing and harvesting of seafood in a captive environment. The predecessor of SSF was founded by Jacob Stolt-Nielsen in 1972 and was acquired by us in 1991.

Until April 29, 2005, SSF produced, processed, and marketed a variety of high quality seafood. SSF had salmon production sites in Norway, North America, Chile, and Scotland, salmon trout production sites in Norway and Chile, a tilapia production site in Canada, turbot production sites in Spain, Portugal, Norway, and France, a halibut production site in Norway, a Southern bluefin tuna ranching operation and production site in Australia and sturgeon and caviar production sites in the U.S. Although SSF diversified into farming species other than salmon, salmon remained the primary focus. SSF had worldwide marketing operations with sales organizations covering the Americas, Europe, and Asia Pacific, and built a substantial seafood trading and distribution business in the Asia Pacific region. The following table sets forth operating revenue by farming region and product for the three years ended November 30, 2006 and reflects the contribution of most of SSF’s operations to the Marine Harvest joint venture as of April 29, 2005:

	For the years ended November 30,
	2006		2005		2004
			(in millions)
Turbot	$	48.7	$	34.8	$	29.1
Sole	0.3		0.1		0.1
Southern Bluefin Tuna	11.3		17.8		17.9
Sub-Total	60.3		52.7		47.1
Other Operations Contributed to Marine Harvest	—		192.8		412.0
Total Operating Revenue	$	60.3	$	245.5	$	459.1

On March 6, 2006, we announced the sale of our entire 25% ownership interest in Marine Harvest. When we transferred the business, we retained our turbot and sole operations in Europe, and Southern bluefin tuna operations in Australia. However, on December 18, 2006, we announced the sale of SSF’s Southern bluefin tuna business.

On December 22, 2006, we announced the completion of SSF’s reacquisition from Marine Harvest of a 75% equity interest in its sturgeon and caviar business, Sterling Caviar LLC, for a total purchase price of $3.8 million and the assumption of loans of $1.3 million, which represented the existing book value of the operations at the time of the reacquisition. The remaining share ownership is held by Sierra Aquafarms. Sterling Caviar LLC is based in Sacramento, California and had 2006 operating revenue of approximately $6 million. For additional information on the purchase of our ownership interest in the sturgeon and caviar business and on the deconsolidation and sale of our ownership in Marine Harvest, see “—General” above and Item 5. “Operating and Financial Review and Prospects—Management Overview—Description of our Business.” As a consequence of these various transactions, SSF’s current and ongoing operations are comprised of its turbot and sole operations in Europe and its sturgeon and caviar business in the U.S.

Turbot juveniles are produced by SSF and held in small land-based tanks through which sea water is pumped continuously. It takes an average of 28 months for the fish to grow to the optimum size for sale (about two kilograms). During this time the fish are sampled to control growth every month and monitored and fed daily, by hand or automatically. We have been developing for a number of years the ability to farm sole. SSF has a production capacity of 50 tons annually in two pilot facilities. SSF’s strategy is to guarantee a supply of turbot and sole to its customers throughout the year as there is very little seasonality in stock levels. SSF’s sales force in Lira, Spain markets all of its turbot production in Europe, mainly in Spain, France and Italy. Traditionally, there have been several intermediaries between producers and consumers of fresh seafood, but there is a trend to sell directly to food service operators, mainly supermarket chains. Most of the turbot is distributed from SSF’s packing plant in Lira, Spain using distribution channels for fresh fish in Galicia, the region of Spain where Lira is located.

SSF’s Southern bluefin tuna was caught in Australia around February of each year, with an average weight of 15 to 20 kilograms. The stock was kept in cages in a harbor with calm waters and fed for a six to eight month period ending in June to September when it was harvested and sold. During the feeding period Southern bluefin tuna doubles its average weight. Business was therefore very seasonal, with the majority of sales concentrated in three months and no stock at all of live Southern bluefin tuna held from October to February. SSF marketed all its Southern bluefin tuna production to the Japanese market, via Japanese importers or international traders. As noted above, on December 18, 2006, we announced the sale of SSF’s Southern bluefin tuna business based in Port Lincoln, Australia, to SAMS Holdings (SA) Pty. Ltd. for proceeds totaling AUS $90.0 million (U.S. $70.0 million at the then prevailing exchange rates).

Unconsolidated Joint Ventures

Marine Harvest

On April 29, 2005, we completed an agreement with Nutreco to contribute our respective worldwide fish farming, processing and marketing and sales operations to a joint venture called Marine Harvest. While we owned Marine Harvest, it was the world’s largest producer and supplier of farmed salmon in the world. Marine Harvest was also an important supplier of sea trout and was pioneering the farming of species new to aquaculture such as cod, halibut, yellowtail, sturgeon, tilapia and barramundi. Marine Harvest’s main seafood markets were Asia, North America and Europe.

Marine Harvest’s sales and distribution methods varied from market to market, depending on the nature of the product and the structure of the market. Sales were to wholesalers, distributors, processors, food service organizations or retailers. Most distribution is performed by third-party suppliers on behalf of Marine Harvest.

Marine Harvest was initially funded with a combination of equity contributions and shareholder loans. Neither SNSA and its affiliates nor Nutreco has any ongoing cash funding obligations to Marine Harvest. In February 2006, Marine Harvest entered into a new €350 million credit facility. Marine Harvest used part of the proceeds from this facility to repay us approximately $65 million of principal repayment on our shareholder loan plus accrued interest.

On March 6, 2006, we announced the sale of our entire 25% ownership interest in Marine Harvest. For additional information on the contribution of our net assets to and sale of our ownership interest in Marine Harvest, see “—General” above and Item 5. “Operating and Financial Review and Prospects—Management Overview—Description of Our Business.” Please also see Note 4 to our Consolidated Financial Statements, included in Item 18 of this Report.

Discontinued Operations

Stolt Offshore

Our offshore contracting business, involving the design, procurement, construction, installation and servicing of offshore surface and subsurface infrastructure for the oil and gas industry, was carried out through SOSA. As of November 30, 2004, we held a 41.7% economic and voting interest and accounted for SOSA using the equity method. As more fully described under Item 5. “Operating and Financial Review and Prospects—Management Overview” and Note 2 to the Consolidated Financial Statements, included in Item 18 of this Report, we deconsolidated the activities of SOSA in our financial results effective the first quarter of fiscal 2004. On January 13, 2005 we sold all of our remaining ownership interest in SOSA. We have reclassified our previously issued financial statements to reflect SOSA as discontinued operations.

Financial Summary of Businesses

The following table sets forth the operating revenue, income or loss from operations and identifiable assets for each of our businesses for the year ended November 30, 2006:

					Operating
					Income
	Operating Revenue				(Loss)			Identifiable Assest
	(in millions, except percentages)
SNTG:
Tankers	$	1,066	68	%	$	130		$	1,535		61	%
Tank Containers	352		22		43			147			6	%
Terminals	94		6		30			372			15	%
SNTG Corporate	4			*	(29		)	76			3	%
	1,516		96		174			2,130			85	%
SSF	61		4		16			389			15	%
Corporate and Other	—			*	(21		)	(5		)	0	%
Total	$	1,577	100	%	$	169		$	2,514		100	%

* Represents less than 1%.

Geographic Distribution

The following table sets out operating revenue by geographic area for our reportable segments for the years indicated. SNTG operating revenue is allocated on the basis of the country or region in which the cargo is loaded. SSF operating revenue is allocated on the basis of the country in which the sale is generated.

Tankers and tank containers operate in a significant number of countries. Revenues from specific foreign countries that contribute over 10% of total operating revenue are disclosed individually, and those that contribute less than 10% are included together under “Other”.

	For the years ended
	November 30,
	2006		2005		2004
			(in millions)
SNTG:
Tankers:
U.S.	$	347	$	301	$	285
South America	93		93		77
Netherlands	77		80		67
Other Europe	175		170		112
Malaysia	104		87		69
Other Asia	144		95		92
Middle East	62		64		49
Africa	64		71		61
Other	—		5		29
	$	1,066	$	966	$	841
Tank Containers:
U.S.	$	105	$	93	$	91
South America	11		11		10
France	37		36		30
Other Europe	83		81		74
China	31		28		16
Japan	17		18		19
Other Asia	52		52		45
Other	16		15		12
	$	352	$	334	$	297
Terminals:
U.S.	$	79	$	71	$	63
Brazil	15		12		13
	$	94	$	83	$	76
SNTG Corporate	$	4	$	8	$	5

Total SNTG	$	1,516	$	1,391	$	1,219

SSF:
U.S.	$	—	$	49	$	119
Canada	—		9		18
Chile	—		7		11
United Kingdom	2		10		28
Norway	1		13		24
Spain	29		22		21
France	5		5		12
Belgium	1		7		12
Italy	9		4		1
Other Europe	3		26		41
Japan	11		43		85
Singapore	—		25		21
Taiwan	—		—		14
Other Asia	—		22		52
Others	—		4		—
Total SSF	$	61	$	246	$	459

Corporate and Other	—		1		2

Total SNSA	$	1,577	$	1,638	$	1,680

Seasonality

SNTG’s markets can be impacted by a variety of seasonal factors including unpredictable weather patterns that can disrupt ship operations, an increase in the clean petroleum market in the winter months caused by increased consumption of oil in the Northern hemisphere, and summer and holiday periods which can result in decreased market activity.

SSF’s turbot operations typically has peak sales in December of twice the level of most other months. Caviar sales typically peak in November and December of each year, with these months accounting for approximately 30 percent of annual sales.

Key Supplier Relationships

Ship bunker fuel is the most significant cost for SNTG, representing approximately 28% of total fleet operating costs and is subject to volatility primarily due to the fluctuating price of oil. The market for bunker fuel is competitive and we source from a number of different suppliers. For additional information, see Item 3. “Key Information—Risk Factors—Risks Related to Our Industries and Operations—Price fluctuations in ship fuel may impact our profitability.”

Feed for fish accounts for approximately 25% of the operating cost for SSF’s turbot operations. Fish feed is typically produced from other wild catch of certain species of fish. Fluctuations in the price of feed could have an impact on SSF’s profitability. SSF’s ability to pass on increases in feed costs to their customers is dependent on the strength of the market for their products. Although there are a limited number of fish feed suppliers, pricing of fish feed is generally competitive.

Regulation

Our businesses are subject to international conventions, U.S. regulations and other governmental regulations which strictly regulate various aspects of our operations. In addition, we are required by various governmental and other regulatory agencies to obtain certain permits, licenses and certificates with respect to our equipment and operations. The type of permits, licenses and certificates required in our operations depend upon a number of factors. We believe that we have all permits, licenses and certificates necessary to conduct our operations and have the ability to obtain new permits, licenses and certificates as needed when entering into new countries. Some countries such as China require that we enter into a joint venture or similar business arrangement with local individuals or businesses in order to conduct business. We have entered into such arrangements where necessary.

Compliance with current health, environmental, safety and other laws and regulations is an ordinary part of our businesses. These laws change frequently and, as an ordinary part of our business, we incur costs to maintain compliance with such laws. Although these costs have not had a material impact on our financial condition or results of operations in recent years, there can be no assurance that they will not have such an impact in the future. Moreover, although it is our objective to maintain compliance with all such laws and regulations applicable to us, there can be no assurance that we will avoid material costs, liabilities and penalties imposed as a result of governmental regulation in the future.

Based on both international and U.S. security initiatives prompted by terrorist activities, we have implemented the security measures required by the U.S. Maritime Transportation Security Act of 2002 (“MTSA”).

Stolt-Nielsen Transportation Group

SNTG is subject to the international and national conventions and regulations which cover ocean shipping generally and the transport and storage of chemicals and oil in bulk specifically. All of our ships hold the necessary certificates which are required by the various trades of different ships in the fleet.

In addition, specifically to protect the purity of fats and vegetable oils, SNTG complies with the latest cargo rules established by the National Institute of Oilseed Products in the U.S. and the Federation of Oils, Seeds, and Fats Associations in Europe. SNTG’s Dedicated Vegetable Oil Service, which consists of ships dedicated to the carriage of vegetable oils, operates in compliance with these relevant rules.

SNTG operates river parcel tankers in Europe which are governed by the European Agreement on Regulations for the Carriage of Dangerous Substances on the Rhine and other applicable standards for service on the Rhine River in Europe. SNTG’s U.S. barging operations are governed by the U.S. Coast Guard safety and pollution prevention regulations.

As a foreign-owned corporation, SNTG is prohibited by U.S. federal law from owning more than a 25% interest in ships operating in the U.S. coastwise trade and in the U.S. inland waterway system.

In addition to many of the regulations governing the parcel tanker operations, SNTG’s tank container operations are subject to: the International Convention for Safe Containers, which establishes guidelines for the construction of tank containers; the International Maritime Dangerous Goods Code, which regulates the construction and periodic testing of equipment used to transport hazardous packaged liquids; and regulations of other comparable national authorities regarding the use of containers on rail cars and the transport of hazardous materials by rail or road. SNTG’s tank container depot in the U.S. is subject to the Occupational Safety and Health Act regulating the working conditions at such facility. Depots located outside of the U.S. are governed by the comparable national and governmental agencies. In addition, SNTG’s tank container operations also comply with rules and regulations of the U.S. Federal Maritime Commission with respect to non-ship operating common carriers.

Additional regulations specific to SNTG’s terminal operations in the U.S. are the Resource Conservation and Recovery Act regulating the reporting, record keeping, and handling of hazardous waste and the Occupational Safety and Health Act regulating the working conditions at U.S. terminals as well as other business facilities. Terminals located outside of the U.S. are governed by the comparable national and local governmental agencies.

The U.S. Oil Pollution Act of 1990 and Comprehensive Environmental Response, Compensation and Liability Act

OPA ‘90 sets out various requirements applicable to shipowners and ship operators in U.S. waters including, among other things, standards and requirements covering the construction of ships carrying oil and oil products (as defined in OPA ‘90,) stringent financial responsibility requirements and expanded contingency planning requirements. OPA ‘90 also increases shipowners’ and ship operators’ potential liability for damages and cleanup and removal costs for pollution accidents in U.S. waters. Ship and facility owners and operators are “responsible parties” and are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a third party, an act of God or an act of war) for all oil spill containment and cleanup costs and other damages arising from oil spills from their ships or facilities. These other damages are defined broadly to include: (i) natural resources damages and the costs of assessment thereof; (ii) real and personal property damages; (iii) net loss to a government entity of taxes, royalties, rents, fees, and other lost revenues; (iv) lost profits or impairment of earning capacity due to property or natural resources damage; (v) net cost of public services necessitated by a spill response, such as protection from fire, safety, or health hazards; and (vi) loss of subsistence use of natural resources.

With limited exceptions, OPA ‘90 requires that all ships ordered after June 30, 1990, or delivered after January 1, 1994, must be built with double hulls to be allowed to call at U.S. ports. There is a timetable for retrofitting existing ships with double hulls or taking them out of service, depending upon the year the ship was built, its gross tonnage, and whether the ship already has a double bottom or double sides. Double bottom ships greater than 5,000 tons and delivered in 1975 or later may operate without retrofitting the

ship with a double hull until the ship reaches 30 years of age or 2015, whichever comes first. To operate in U.S. waters after 2015, ships must have both a double bottom and double sides.

Double bottom installation has become standard on most parcel tankers and chemical tankers since regulations of the IMO relating to the carriage of hazardous products in bulk became effective in January 1, 1995. All of SNTG’s parcel tankers already have double bottoms. It is SNTG’s intention that all tankers ordered in the future will comply with the double-hull requirements identified above.

The liability provisions of OPA ‘90 are applicable to “oil” as defined in OPA ‘90. For this purpose, “oil” means oil of any kind or in any form, including, but not limited to, petroleum, fuel oil, sludge, oil refuse, and oil mixed with wastes other than dredged spoil, but does not include any substance which is specifically listed or designated as a “hazardous substance” under CERCLA. Some of the chemicals carried on SNTG’s ships are covered by the provisions of CERCLA. SNTG’s ships frequently carry some parcel cargoes of lubricating oils and additives and the ships’ engines are powered by fuel oil. In addition, cargoes of “clean petroleum products,” which are generally covered by the provisions of OPA ‘90, are occasionally carried on SNTG’s ships. Animal fat and vegetable oils as well as other non-petroleum oils are included within the OPA ‘90 definition of “oil.”

In compliance with OPA ‘90 requirements, SNTG has obtained Certificates of Financial Responsibility for all of our ships which call on U.S. ports.

Under the Coast Guard and Maritime Transportation Act of 2006, OPA ‘90 limits increased for shipowners’ and ship operators’ liability for tankers over 3,000 gross tons to the greater of $1,200 per gross ton or $22 million for damages, cleanup, and removal costs. Owners and operators of onshore facilities, including oil terminals, are liable for removal costs and damages up to a limit of $62 million. However, OPA ‘90 provides for unlimited liability if the spill was proximately caused by: (i) gross negligence or willful misconduct; (ii) violation of an applicable federal safety, construction or operating regulation by the responsible party, its agents or employees or any person acting pursuant to a contractual relationship with it; or (iii) if the owner or operator fails to report the spill, provide reasonable cooperation in connection with a removal order or, without sufficient cause, to obey an order issued by an authority under a removal regulation. For owners and operators of ships carrying hazardous substances as cargo, the liability provisions under CERCLA are $300 per gross ton or $5 million, whichever is greater. Facility owners and operators are liable for the total of all response costs plus $50 million for damages as defined under CERCLA. The CERCLA damages provisions are broadly similar to those of OPA ‘90. CERCLA also contains provisions similar to OPA ‘90 for breaking liability limits. CERCLA contains various reporting provisions, some of which are more detailed than OPA ‘90. Furthermore, both OPA ‘90 and CERCLA provide that individual U.S. states may issue their own pollution prevention laws and regulations, which laws and regulations may impose greater liabilities than set out in, and which may differ significantly from, OPA ‘90 or CERCLA. Many states have, in fact, enacted such provisions which provide for virtually unlimited liability for pollution accidents occurring in their waters.

OPA ‘90 also sets out contingency plan requirements with respect to cleanup and removal of the substances covered by its provisions. OPA ‘90 also requires expenditure to meet specific response standards for equipment to be kept on board ships. The contingency plan requirements also apply to marine transportation-related facilities, including U.S. Coast Guard-regulated onshore oil terminals, tank trucks, and railroad tank cars. We also meet Panama Canal Shipboard Oil Pollution Emergency Plan requirements for Panama Canal transit.

International Ship and Port Facility Security Code and U.S. Maritime Transportation Security Act of 2002

A variety of legislative initiatives have been enacted to increase maritime security worldwide in response to the September 11, 2001 terrorist attacks. MTSA and its implementing regulations require certain security measures aboard ships operating in waters subject to the jurisdiction of the U.S. Similarly,

in December 2002, amendments to the Convention for Safety of Life at Sea created the International Ship and Port Facility Security Code (“ISPS Code”), a new chapter dealing with maritime security. The ISPS Code imposes various security obligations on ships and port facilities, including on board installation of automated information systems to enhance communications; on board installation of ship security alert systems; approval of ship security plans; and compliance with flag state security certification requirements of the country under which the ship is flagged. Both the ISPS Code and MTSA came into effect on July 1, 2004.

All of our ships obtained security certification before July 1, 2004. Flag state administrators are responsible for issuing ISPS Certificates for ships and the relevant authorities have corresponding responsibility for certifying ISPS compliance for port and terminal facilities. The U.S. authority responsible for implementation is the U.S. Coast Guard. The security implementation requirement also applies to port and terminal facilities worldwide. All our terminals are now certified as required.

Inspection by a Classification Society and Drydocking

The hull and machinery of SNTG’s ships are “classed” by a classification society authorized by its country of registry. The classification society certifies that the ship is safe and seaworthy in accordance with the classification rules as well as with applicable rules and regulations of the country of registry of the ship and the international conventions of which that country is a member.

Each classed ship is inspected by a surveyor of the classification society. A visual inspection is carried out annually to ascertain the general condition of the ship or relevant items. Intermediate surveys are carried out at the second or third annual survey. This survey includes a visual inspection of the hull structure, machinery and electrical installations and equipment. Renewal surveys which involve a major inspection of the hull structure, machinery installations and equipment are carried out at five-year intervals. A classed ship is also required to be drydocked at routine intervals specified by the classification society, for inspection of the underwater parts of the ship. Should any non-compliance be found, the classification society surveyor will issue its report as to appropriate repairs which must be made by the ship owner within the time limit prescribed. Insurance underwriters make it a condition of insurance coverage that a classed ship be “in class,” and all of our ships currently meet that condition.

International Convention for the Prevention of Pollution from Ships

The IMO, a specialized agency of the United Nations, is responsible for improving maritime safety and preventing pollution from ships by establishing regulations for international shipping companies. Effective January 1, 2007, the IMO adopted amendments to the MARPOL Annex II, which require that a number of products, such as vegetable oil, palm oil, coconut oil and palm fatty acids, that formerly could be transported in single-hull cargo tanks, be transported in double-hull cargo tanks. It is estimated by market research companies that this will affect approximately 46 million tons of cargo worldwide which were previously transported by single-hull cargo tanks. Although the full impact on our markets is not fully known, 72% of our ships are equipped with double-hull cargo tanks and we expect an increase in demand for those ships. For additional information, see Item 5. “Operating and Financial Review and Prospects—Factors Affecting Our Financial Condition and Results of Operations.’’

The IMO has further developed the Annex VI protocol of MARPOL 73/78 Regulations for the Prevention of Air Pollution from Ships (“MARPOL Annex VI”). The regulations prohibit ozone-depleting emissions, put limits on sulphur oxide and nitrogen oxide emissions and set retroactive requirements for diesel engines and incinerators. Marpol Annex VI became effective on May 19, 2005 and applies to all of our ships. The regulations cover a wide range of emission controls. One example of this is Regulation 14 which concerns sulphur oxide emissions from ships. Regulation 14 prescribes the quality of fuel to be used generally and within certain areas. It stipulates that the sulphur content in the fuel for worldwide consumption shall not exceed 4.5% and that fuel used within Sulphur Emission Control Areas (“SECA”) shall not have a sulphur content exceeding 1.5%. SECA are areas where stricter control measures for sulphur emission are in place, requiring the use of more expensive low-sulphur fuel within the area, as well as on entering and leaving the area. For ships with standard fuel oil system configurations this operation may have time and cost implications, including the higher cost of low-sulphur fuels. On May 16, 2006, the Baltic Sea was designated as a SECA, and on August 11, 2007, the North Sea and the British Channel will be adopted as a SECA. Further SECA will be adopted in due course.

Stolt Sea Farm

SSF is subject to the laws and regulations of the individual countries, including the U.S., Spain, Norway, Portugal and France, in which its operations are situated, which strictly regulate various aspects of its operations. The hatcheries, on growing sites, and slaughteries are regulated by state environmental laws and laws regarding treatment of, and protection from, fish diseases and pollution.

All species of sturgeon have now been added to Appendix II of the Convention on International Trade in Endangered Species of Wild Fauna and Flora. As a result, all international trade of sturgeon and caviar is now regulated, and all exports require proper documentation. While this does not affect the sale of SSF’s sturgeon and caviar products within the U.S., it does mean that exports from the U.S. require proper license documentation. We have obtained the necessary license documentation from the U.S. government and have the required procedures in place to export.

Competition

Stolt-Nielsen Transportation Group

Each of SNSA’s businesses competes in a dynamic and highly-competitive environment. In the parcel tanker business, price is an important factor in determining which supplier of transportation services is awarded a contract but it is not the only factor. Additional factors that drive customers’ decisions include, among others, relationships with existing customers, the quality of service, the track record in providing service if the firm is the incumbent, the environmental and safety record of the firm, the availability of service—including sufficient frequency of voyages in relevant tradelanes, the technical capabilities of ships, the degree of customized service required, the ability to assure sufficient capacity despite fluctuating contract demand, and whether the customer wishes to have integrated door-to-door service through a combination of tankers, container and terminal service. Across all of SNTG’s businesses, SNTG’s customer base includes the world’s largest chemical companies, and its customers are extremely sophisticated consumers of transportation and storage services, with extensive in-house transportation purchasing departments and the ability to call upon outside brokers and consultants in making logistics and transportation purchasing decisions, whether on a spot or contract basis.

In general, SNTG’s tanker operations compete with operators based primarily in Europe and the Asia Pacific region. The parcel tanker business can be divided into two segments, deep-sea and regional, which depend on the routes and ships employed. For its deep-sea COA business, SNTG competes with many competitors worldwide including Odfjell, Aurora, Clipper Wonsild Tankers, Jo Tankers, Dorval Shipping, Marnavi, Tokyo Marine, Eitzen Chemical, Chembulk Tankers, MISC, Hiltveit Associates, Fairfield

Chemical Carriers, Formosa Marine, Seatrans Ermefer and United Chemical Tankers. SNTG’s parcel tanker business also competes with owners who provide clean petroleum product transportation services, such as OMI, TORM and Brostrom Tankers SA, as well as regional fleets and in some cases the customer’s own fleet. SNTG’s tank container operations compete primarily with European-based tank container operators. The competition in the tank container market is highly fragmented, with SNTG facing competition from a variety of competitors, including larger, global players. Competitors include Hoyer, VOTG Tanktainer, United Tank Transport, Bulkhaul, Suttons, Interflow, Leschaco, Dana, Nippon Concept and Taby, as well as scores of smaller tank container operators. SNTG also competes with tank container leasing companies, freight forwarders, container shipping lines, which operate tank containers and other modes of bulk liquid transportation, including intermediate bulk containers, flexibags, drums and tank trucks. SNTG’s terminal operations compete with other international terminal networks, local independent terminal companies as well as our customers’ own storage facilities. Geographic location is the key competitive factor. In the ports where SNTG has storage facilities, SNTG either maintains a significant presence or occupies a niche in terms of products handled.

Stolt Sea Farm

In Spain, Portugal and France, SSF competes primarily with other Spanish and French producers of turbot and with suppliers of wild turbot.

Caviar is produced in small sites in different countries around the world, which are typically the same size as our production sites. SSF competes with all of them and with the caviar from wild sturgeon, which is subject to over-catch and regulating quotas that are decreasing its availability.

Insurance

We maintain insurance against physical loss and damage to our assets as well as coverage against liabilities to third parties we may incur in the course of our operations. Assets are insured at replacement cost, market value, or assessed earning power. The SNSA corporate insurance includes SNTG and SSF.

The owned fleet of SNTG is currently covered by hull and machinery insurance in the aggregate amount of $2.8 billion. The hull and machinery policy covers the value of the ships themselves and related equipment. Marine liabilities, such as loss of life and injury, collisions, pollution and liability arising from the carriage of cargo, which may be incurred through the operation of ships, are insured under marine protection and indemnity insurance. The coverage has a limit of approximately $5 billion per incident, except for marine oil pollution which is limited to $1 billion per occurrence. Non-marine liabilities, such as liability for third-party injury and property damage not arising from ship operations, are insured up to $200 million per event.

Our fish stock is insured for losses with respect to mortality and physical loss of fish stock. Our captive insurance company retains a deductible, the excess of which is reinsured. The limit on the reinsurance is $7.3 million for any one event and the average value of the stock is $17 million.

We believe our insurance coverage to be in such form, against such risks, for such amounts and subject to such deductibles as are prudent and normal to those industries in which we operate. It is possible, however, that we could incur liabilities in excess of our insurance coverage.

For additional information on our captive insurance subsidiary, Marlowe Insurance Ltd., see Item 7. “Major Shareholders and Related Party Transactions—Related Party Transactions—Captive Insurance Company.”

For information on risks related to our insurance coverage, see Item 3. “Key Information—Risk Factors—Risks Related to Our Industries and Operations—We are exposed to substantial hazards and risks that are inherent in the industries in which we operate, which may result in loss of revenues, increased

expenses, or liabilities which may potentially exceed our insurance coverage and contractual indemnity provisions.”

Significant Subsidiaries

As of April 30, 2007, our significant subsidiaries are as follows:

Name of Company	Country of Incorporation	% Shareholding
Stolt-Nielsen Transportation Group Ltd.	Liberia	100
Stolt-Nielsen Transportation Group Ltd.	Bermuda	100
Stolt-Nielsen Transportation Group Inc.	U.S.	100
Stolt-Nielsen Transportation Group B.V.	Netherlands	100
Stolt-Nielsen Investments N.V.	Netherlands Antilles	100
Stolt-Nielsen Holdings B.V.	Netherlands	100

Research and Development; Patents and Licenses

Stolt-Nielsen Transportation Group

SNTG does not have significant expenditures for research and development.

Stolt Sea Farm and Marine Harvest

Expenditures in research and development include expenditures on disease control, breeding programs, and the development of new farmed species such as sole. Expenditures for research and development are not significant.

Property, Plants and Equipment

Stolt-Nielsen Transportation Group

The following table describes the parcel tankers that are operated by SNTG, both within and outside STJS. It also includes ships that SNTG leases or time-charters from other parties. See the notes to the table below pertaining to ownership and registry.

Parcel Tankers Operated by Stolt Tankers Joint Service
as of April 30, 2007

	Year	DWT
	Built	(Metric Tons)	Ownership		Registry
STOLT INNOVATION CLASS
Stolt Capability	1998	37,000	NYK Stolt		Liberia
Stolt Efficiency	1998	37,000	SNTG BV	(1)	Cayman
Stolt Inspiration	1997	37,000	SNTG BV	(1)	Cayman
Stolt Creativity	1997	37,000	SNTG BV	(1)	Cayman
Stolt Invention	1997	37,000	NYK Stolt		Liberia
Stolt Confidence	1996	37,000	SNTG BV	(1)	Cayman
Stolt Innovation	1996	37,000	SNTG BV	(1)	Cayman
Stolt Concept	1999	37,000	SNTG BV	(1)	Cayman
Stolt Effort	1999	37,000	SNTG BV	(1)	Cayman
STOLT ACHIEVEMENT CLASS
Stolt Achievement	1999	37,000	SNTG BV	(1)	Cayman
Stolt Perseverance	2001	37,000	SNTG BV	(1)	Cayman
STOLT HELLULAND CLASS
Stolt Vinland	1992	29,999	SNTG BV	(1)	Cayman
Stolt Vestland	1992	29,999	SNTG BV	(1)	Cayman
Stolt Helluland	1991	29,999	SNTG BV	(1)	Cayman
Stolt Markland	1991	29,999	SNTG BV	(1)	Cayman
STOLT SAPPHIRE CLASS
Stolt Jade	1986	38,746	SNTG BV	(1)	Cayman
Stolt Aquamarine	1986	38,746	SNTG BV	(1)	Cayman
Stolt Topaz	1986	38,720	SNTG BV	(1)	Cayman
Stolt Emerald	1986	38,720	SNTG BV	(1)	Cayman
Stolt Sapphire	1986	38,746	NYK Stolt		Liberia
STOLT FALCON CLASS
Stolt Eagle	1980	37,082	SNTG BV	(1)	Liberia
Stolt Condor	1979	37,200	SNTG BV	(1)	Liberia
Stolt Heron	1979	37,075	SNTG BV	(1)	Liberia
Stolt Hawk	1978	37,080	SNTG BV	(1)	Liberia
Stolt Osprey	1978	37,080	SNTG BV	(1)	Liberia
Stolt Falcon	1978	37,200	SNTG BV	(1)	Liberia
STOLT PRIDE CLASS
Stolt Excellence	1979	32,093	SNTG BV	(1)	Liberia
Stolt Loyalty	1978	32,091	SNTG BV	(1)	Liberia
Stolt Tenacity	1978	32,093	SNTG BV	(1)	Liberia
Stolt Integrity	1977	32,057	SNTG BV	(1)	Liberia
Stolt Sincerity	1976	31,942	SNTG BV	(1)	Liberia
Stolt Pride	1976	31,942	SNTG BV	(1)	Liberia
STOLT AVANCE CLASS
Stolt Avenir	1978	23,275	SNTG BV	(1)	Liberia
STOLT SEA CLASS
Stolt Sea	1999	22,500	SNTG BV	(1)	Cayman
Stolt Sun	2000	22,210	SNTG BV	(1)	Cayman
Stolt Span	1999	22,460	NYK Stolt		Liberia
Stolt Surf	2000	22,460	SNTG BV	(1)	Cayman
Stolt Stream	2000	22,917	SNTG BV	(1)	Cayman

Stolt Spray	2000	22,460	SNTG BV	(1)	Cayman
SUPERFLEX CLASS
Stolt Guardian	1983	39,726	SNTG BV	(1)	Liberia
Stolt Protector	1983	39,782	SNTG BV	(1)	Liberia
Stolt Peak	1991	40,153	SNTG BV		Liberia
Stolt Hill	1992	40,160	SNTG BV		Liberia
Stolt Mountain	1994	40,160	SNTG BV		Liberia
STOLT ASPIRATION CLASS
Stolt Aspiration	1987	12,219	NYK Stolt		Liberia
Stolt Alliance	1985	12,674	NYK Stolt		Hong Kong
Stolt Taurus	1985	12,749	T/C by SNTG BV		Liberia
Stolt Titan	1985	12,691	T/C by SNTG BV		Liberia
Stolt Devon	1985	12,721	Bibby		Panama
TRIUMPH CLASS
Stolt Kent	1998	19,300	Bibby		Isle of Man
Stolt Dorset	1997	19,299	Bibby		Panama
STOLT VALOR CLASS
Stolt Valor	2003	25,000	T/C by SNTG BV		Hong Kong
Stolt Vanguard	2004	25,261	T/C by SNTG BV		Hong Kong
Stolt Virtue	2004	25,000	T/C by SNTG BV		Liberia
Stolt Vision	2005	25,147	T/C by SNTG BV		Hong Kong
OTHER PARCEL TANKERS
Stolt Nanami	2003	19,500	T/C by STJS		Panama
Stolt Courage	2004	32,329	T/C by STJS		Philippines
Stolt Endurance	2004	32,306	T/C by STJS		Philippines
Stolt Glory	2005	32,400	T/C by SNTG BV		Philippines
Stolt Strength	2005	32,400	T/C by SNTG BV		Philippines
Stolt Zulu	2006	25,000	Unicorn		Panama
Stolt Basuto	2006	25,000	Unicorn		Singapore
Stolt Swazi	2007	19,900	Unicorn		Panama
Stolt Viking	2000	26,600	SNTG BV	(1)	Cayman
Moyra	2005	19,820	T/C by STJS		Gibraltar
Holmen	2006	19,700	T/C by STJS		Singapore
Stolt Ami	2006	19,900	T/C by SNTG BV		Panama
Varden	1989	29,995	T/C by SNTG BV		Malaysia
Stolzen	1990	29,990	T/C by SNTG BV		Malaysia
Hellen	2006	19,700	T/C by STJS		Singapore
Matterhorn	2006	19,925	T/C by STJS		Switzerland
Jo Spruce	1993	36,782	T/C by STJS		Netherlands
Shamrock Venus	2006	19,700	T/C by STJS		Singapore
TOTAL IN STJS (73 ships)		2,156,880

Parcel Tankers and Barges Outside the Stolt Tankers Joint Service
Operated and/or Controlled by Stolt Affiliates
as of April 30, 2007

	Year	DWT
	Built	(Metric Tons)	Ownership		Registry
STOLT-NIELSEN INTER-EUROPE SERVICE
Stolt Shearwater	1998	5,498	DRF		Cayman
Stolt Kittiwake	1993	4,710	SNTG BV	(1)	United Kingdom
Stolt Guillemot	1993	4,676	SNTG BV	(1)	United Kingdom
Stolt Cormorant	1999	5,498	DRF		Cayman
Stolt Kestrel	1992	5,758	SNTG BV	(1)	Cayman
Stolt Petrel	1992	4,794	SNTG BV	(1)	Cayman
Stolt Tern	1992	4,794	SNTG BV	(1)	Cayman
Stolt Dipper	1992	4,794	SNTG BV	(1)	Cayman
Stolt Kite	1992	4,794	SNTG BV	(1)	Cayman
Stolt Hikawa	1992	8,080	SNTG BV	(1)	Cayman
Stolt Puffin	1992	5,758	SNTG BV	(1)	Cayman
Stolt Fulmar	2000	5,498	DRF		Cayman
Stolt Egret	1992	5,758	SNTG BV	(1)	Cayman
Stolt Avocet	1992	5,758	SNTG BV	(1)	Cayman
Stolt Gannet	1992	7,950	SNTG BV	(1)	Cayman
Stolt Skua	1999	8,594	SNTG BV		Cayman
Stolt Teal	1999	8,581	SNTG BV		Cayman
Stolt Frigate	1988	6,155	SNTG BV		United Kingdom
STOLT-NIELSEN INTER-ASIA SERVICE
Stolt Distributor	2002	3,992	T/C by SNTG BV		Panama
Royal Cristal 7	2007	13,081	T/C by SNTG BV		Panama
STOLT NYK ASIA PACIFIC SERVICE
Stolt Suisen	1998	11,537	NSSH		Liberia
Stolt Botan	1998	11,553	NSSH		Liberia
Stolt Kikyo	1998	11,545	NSSH		Liberia
Stolt Acacia	1986	9,940	NSSH		Cayman
Stolt Azami	1997	11,564	NSSH		Liberia
Stolt Ayame	1991	9,070	NSSH		Hong Kong
Stolt Azalea	1988	7,582	NSSH		Liberia
Stolt Lily	1988	7,593	NSSH		Liberia
Stolt Orchid	2003	8,811	T/C by SNTGB		Panama
Stolt Jasmine	2005	12,430	T/C by NSSH		Panama
Stolt Rindo	2005	11,519	T/C by NSSH		Panama
Stolt Violet	2004	8,792	T/C by SNTGB		Panama
SHANGHAI SINOCHEM-STOLT SHIPPING
Caihongnushnen	2000	3,713	SSC		China
Bai Yang	2006	3,697	SSMS		China
Ao Xing	1998	3,989	SNTG BV		China
Wang Nian Qing	2007	3,200	SSMS		China
Chang Chun Tern	2006	3,200	SSMS		China

Hong Feng	2007	3,697	SSMS	China
STOLT-NIELSEN INLAND TANKER SERVICE
Stolt Alliantie	1999	1,600	T/C by SNTG BV	Netherlands
Stolt Emden	1980/1998	1,388	T/C by SNTG BV	Germany
Stolt Madrid	1994	1,560	SNTG BV	Netherlands
Stolt Oslo	1994	1,556	SNTG BV	Netherlands
Ingrit	1994	1,202	T/C by SNTG BV	Netherlands
Stolt Waal	1993	2,095	SNTG BV	Netherlands
Stolt Somtrans	1993	2,408	T/C by SNTG BV	Belgium
Stolt Wien	1993	2,157	SNTG BV	Netherlands
Stolt Mosel	1992	2,133	SNTG BV	Netherlands
Stolt Main	1992	2,124	SNTG BV	Netherlands
Stolt Neckar	1992	2,095	SNTG BV	Netherlands
Stolt Maas	1992	2,096	SNTG BV	Netherlands
Stolt Basel	1992	2,404	SNTG BV	Netherlands
Stolt Lausanne	1992	2,359	SNTG BV	Netherlands
Turbulentie	1986/1990	1,777	T/C by SNTG BV	Netherlands
Stolt Koeln	1989	1,701	T/C by SNTG BV	Germany
Tolerantie	2006	3,000	T/C by SNTG BV	Netherlands
Thysstad	2000	2,500	T/C by SNTG BV	Belgium
Stolt Merlux	2002	2,001	T/C by SNTG BV	Netherlands
Stolt Texas	2002	3,198	T/C by SNTG BV	Netherlands
Wervelwind	1988/2003	1,689	T/C by SNTG BV	Netherlands
Stolt Hamburg	1992	1,283	T/C by SNTG BV	Netherlands
Stolt Variante	2003	2,000	T/C by SNTG BV	Netherlands
Carrera	2004	3,149	T/C by SNTG BV	Belgium
Fellowship	2004	3,143	T/C by SNTG BV	Netherlands
Provider	2004	3,147	T/C by SNTG BV	Netherlands
Poseidon	2000	2,512	T/C by SNTG BV	Netherlands
Concentus	2004	2,992	T/C by SNTG BV	Netherlands
Stolt Antwerpen	1984	1,600	T/C by SNTG BV	Netherlands
Christiaan	2000	2,554	T/C by SNTG BV	Netherlands
Mirevito	1999	1,500	T/C by SNTG BV	Netherlands
Roxanna	2000	2,595	T/C by SNTG BV	Netherlands
Orinoco	2004	1,875	T/C by SNTG BV	Belgium
Emma06	2005	2,994	T/C by SNTG BV	Netherlands
Ardijo	1987	3,177	T/C by SNTG BV	Germany
Oranje Nassau	2005	3,348	T/C by SNTG BV	Netherlands
Stanleystad	2005	5,750	T/C by SNTG BV	Belgium
Piz Amalia	1993	1,605	T/C by SNTG BV	Netherlands
Piz Albris	1991	1,608	T/C by SNTG BV	Netherlands
Piz Albana	1992	1,605	T/C by SNTG BV	Netherlands
Thrasos	1992	2,717	T/C by SNTG BV	Netherlands
STOLT-NIELSEN TRANSPORTATION GROUP INC.
MMI 101	1964	2,186	T/C by SNTGI	U.S.
MMI 110	1964	1,991	T/C by SNTGI	U.S.
MMI 111	1968	1,991	T/C by SNTGI	U.S.
MMI 304	1968	2,436	T/C by SNTGI	U.S.

MMI 501	1973	1,994	T/C by SNTGI	U.S.
Total Outside STJS (84 ships)		372,748
GRAND TOTAL (157 ships)		2,529,628

(1) These parcel tankers are subject to ship mortgages related to certain of our debt. The total net book value of mortgaged SNTG ships was approximately $0.9 billion as of April 30, 2007.

Notes:

“SNTG BV” means Stolt-Nielsen Transportation Group B.V.

“SNTGB” means Stolt-Nielsen Transportation Group Ltd. (Bermuda)

“SNTGI” means Stolt-Nielsen Transportation Group Inc.

“NYK Stolt” means NYK Stolt Tankers S.A., which is 50% owned by us.

“NSSH” means NYK Stolt Shipholding Inc., which is 50% owned by us.

“T/C” means time-chartered which is where a ship is hired for a certain period of time and the hire includes the crew and technical management of the ship.

“Bibby” means Bibby Pool Partner Limited.

“Unicorn” means Unicorn Lines (Pty) Limited.

“DRF” means DS-Rendite-Fonds Nr. 99 CFS GmbH & Co. Produktentanker KG, to which three ships were sold and leased back to us.

“SSC” means Sinochem Shipping Co. Ltd (Hainan), which is the other partner of the Stoltchem Ship Management (Shanghai) Ltd joint venture, which is 49% owned by us.

“SSMS” means Stoltchem Ship Management (Shanghai) Ltd., which is 49% owned by us.

Other Properties—SNTG

In addition to owned or leased office space, we own or hold under long-term leases the following real property in connection with SNTG as of April 30, 2007:

			Debt Outstanding
			(as of February
	Owned	Leased	28, 2007)
	(acres)		(in millions)
Houston bulk liquid storage terminal	214	—	$	144	(a)
Braithwaite bulk liquid storage terminal	603	—	144		(a)
Santos bulk liquid storage terminal	28	—	—
Perth Amboy land	80	—	—
Singapore tank container depot	—	4	—
Rotterdam pier	—	3	—
	925	7	$	144	(a)

(a) Both the Houston and Braithwaite bulk liquid storage terminals are collateral for a $144 million term loan.

Other Properties—SSF

In addition to owned or leased office space, we own or hold under long-term leases the following real property in connection with SSF as of April 30, 2007.

	Owned	Leased	Production Capacity
	(acres)		(tons/year)
Ongrowing Sites
Vilan Spain	21.5	—	1,200
Lira Spain	23.5	—	1,200
Quilmas Spain	3.7	—	340
Merexo Spain	5.6	—	280
Couso Spain	6.7	—	350
Palmeira Spain	0.7	—	60
Tocha Portugal	—	58.1	220
Oye Norway	—	5.1	240
Anglet France	—	5.1	190
Subtotal	61.7	68.3	4,080

			(thousands of juveniles/year)
Hatcheries
Merexo Spain	1.5	—	2,000
Quilmas Spain	1.2	—	1,500
Subtotal	2.7	—	3,500

			(tons/year)
Processing Plant
Lira Spain	0.2	—	4,500
Subtotal	0.2	—	4,500
Total	64.6	68.3

None of the above SSF facilities are collateral for our debt obligations.

Capital Expenditures

Capital expenditures by business over the last three years are summarized below. There were no significant disposals during the three-year period.

	For the years ended November 30,
	2006		2005		2004
	(in millions)
SNTG:
Tankers	$	264.4	$	93.0	$	6.5
Tank Containers	18.4		35.3		3.7
Terminals	11.3		20.6		23.6
SNTG Corporate	1.6		4.3		0.3
Total SNTG	295.7		153.2		34.1
SSF	3.1		5.6		17.2
Sub-total	298.8		158.8		51.3
Discontinued Operations	—		—		1.6
Total SNSA	$	298.8	$	158.8	$	52.9

Our projected capital expenditures for 2007 amount to approximately $490 million, comprised of $438 million for SNTG, $12 million for SSF and $40 million for SNSA Corporate. During the quarter ended February 28, 2007, we spent approximately $44 million for SNTG, relating mainly to the down-payment for newbuildings of $24 million and purchase of 570 tank containers for $11 million. The

remaining major projects for SNTG in 2007 are primarily related to the down-payment for newbuildings of $234 million, upgrades to newly purchased ships for $11 million, life extensions of three parcel tankers, the Stolt Integrity, Stolt Sincerity and Stolt Falcon, for $6 million, purchase of the Multitank Iberia for $15 million, expansion of terminal facilities of $14 million, the repurchase of 2,632 tank containers which are currently on operating lease for $32 million and the purchase of 1,430 tank containers for $34 million. The remaining major projects for SSF in 2007 are primarily related to capacity and maintenance projects.

We anticipate financing our projected capital expenditure primarily through: a) cash flow from operations and b) commercial bank and export bank loans.

Further, during the quarter ended February 28, 2007, we contributed $10 million to Shanghai Sinochem-Stolt Shipping Co. Ltd. for capital expansion of the joint venture. We also expect to contribute in 2007 an additional $13 million to Shanghai Sinochem-Stolt Shipping Co. Ltd., $5 million to Oiltanking Stolthaven Antwerp N.V., $23 million to Tianjin Stolthaven Jetty Co. Ltd. and Tianjin Stolthaven Terminal Co. Ltd. and $22 million to Stolthaven Ningbo, Ltd. for capital expansion of the joint ventures. In addition, as of February 28, 2007 we have made a $21 million shareholder loan to Oiltanking Stolthaven Antwerp N.V. and we expect to loan them an additional $20 million in 2007. This has been and will be used of repay external debt of Oiltanking Stolthaven Antwerp N.V.

Proceeds from Asset Sales

In 2006, proceeds from sale of assets were $24.1 million, primarily from the sale of five ships (the Stolt Taurus, Stolt Titan, Stolt Avance, Stolt London and Stolt Rom) and sale of land in Houston.

In 2005, proceeds from sale of assets were $9.4 million, primarily from the sale of three ships (the Stolt Praag, Stolt Hoechst and Stolt Berlin), the sale of an Argentine land parcel, a condominium in Greenwich, Connecticut, and the sale of our interest in Seabulk International, Inc.

In 2004, proceeds from sale of assets were $3.8 million, consisting of miscellaneous asset sales by SNTG for $3.2 million and by SSF for $0.6 million.

In addition, in 2004 we received $13.2 million as a dividend from Edgewater Park Associates, Inc., a non-consolidated joint venture, in connection with the sale of our interest in a Greenwich, Connecticut office building leased by SNTG. The dividend is included in “Dividends from non-consolidated joint ventures” in the Consolidated Statement of Cash Flows.

Item 4.A. Unresolved Staff Comments.

We have received no written comments regarding our periodic or current reports from the staff of the Securities and Exchange Commission that were issued 180 days or more preceding the end of our 2006 fiscal year and that remain unresolved.

Item 5. Operating and Financial Review and Prospects.

Introduction

This section discusses matters we consider important for an understanding of our financial condition and results of operations during each of the three fiscal years in the period ended November 30, 2006. This discussion consists of:

· Management Overview;

· Factors Affecting Our Financial Condition and Results of Operations;

· Critical Accounting Estimates;

· Impact of Recent Accounting Standards;

· Strategic Outlook;

· Outlook for Fiscal Year 2007;

· Results of Operations; and

· Liquidity and Capital Resources.

You should read this section in conjunction with the Consolidated Financial Statements and the Notes thereto, included in Item 18 of this Report.

Management Overview

SNSA is a Luxembourg company. Together with our subsidiaries and investments, we are engaged primarily in two businesses: transportation; and seafood production, farming and processing. The transportation business is conducted through SNTG; and the seafood business is carried out through SSF. SNTG and SSF are wholly owned subsidiaries.

On April 29, 2005, we completed a joint venture called Marine Harvest, between SSF and the fish farming and sales business of Nutreco. We contributed most of the operations of SSF into the Marine Harvest joint venture, retaining SSF’s turbot and sole operations in Europe and its Southern bluefin tuna ranching operations in Australia. During fiscal year 2006 and the most of 2005, we owned 25% of the outstanding shares of Marine Harvest and Nutreco owned the remaining 75%. On March 6, 2006, we announced the sale of our entire 25% ownership interest in Marine Harvest and on March 29, 2006 we received prepayment of €293.8 million ($353.5 million at the then current exchange rate) representing our full share of the proceeds of the sale. The transfer of ownership, which remained subject to approvals from regulatory and competition authorities, was completed on December 29, 2006. Accordingly we continued to include the results of Marine Harvest in our consolidated results for the fiscal year ended November 30, 2006 using the equity method of accounting. On December 18, 2006, we announced the completion of the sale of SSF’s Southern bluefin tuna business. The results of SSF’s Southern bluefin tuna operations have been included in SNSA’s consolidated results for the year ended November 30, 2006. On December 22, 2006, we announced the completion of SSF’s reacquisition from Marine Harvest of a 75% equity interest in its sturgeon and caviar business, Sterling Caviar LLC for $5.1 million. As a consequence of these various transactions, SSF’s current and ongoing operations are comprised of its turbot and sole operations in Europe and its sturgeon and caviar business.

Until January 13, 2005, we also had an ownership interest in SOSA, an offshore contracting business. Throughout much of fiscal year 2004, including at year end, we owned a 41.7% economic and voting interest in SOSA. We deconsolidated the activities of SOSA in our financial reports as of February 19, 2004, as we no longer had a controlling interest. From the second quarter of 2004 on, we accounted for our interest in SOSA using the equity method of accounting. On January 13, 2005, we sold all of our ownership interest in SOSA. We reported a net gain of $355.9 million on the sale in the results for the first quarter of 2005.

Our Common Shares traded in the form of ADSs (each ADS representing one Common Share) in the U.S. on Nasdaq. Considering the relatively limited trading volume of our ADRs on Nasdaq and our belief that the costs and expenses associated with maintaining a dual listing outweighed the benefits of continuing a U.S. listing and registration, we have voluntarily delisted from Nasdaq effective as of the close of trading on May 21, 2007, and terminated our American Depositary Receipt program. As part of the costs associated with the delisting and cancellation of the ADR program, we have arranged with the ADR depositary for a reduction of the termination fee charged to ADR holders pursuant to the Deposit Agreement from the $0.05 fee per ADS presented for cancellation to $0.025 per ADS. We have agreed to pay a fee to the depositary of $200,000 related to this fee reduction, in addition to an approximate $293,000 reimbursement to be paid the depositary for previously waived expenses and fees. We intend to file a Form 15F with the SEC to terminate our registration and reporting obligations under the Securities

Exchange Act as soon as we become eligible to do so. We will maintain our listing in Norway on the Oslo Børs.

Description of Our Businesses

Stolt-Nielsen Transportation Group

SNTG is engaged in the worldwide transportation, storage and distribution of bulk liquid chemicals, edible oils, acids and other specialty liquids. SNTG is able to offer our customers a range of transportation and storage solutions on a worldwide basis, through our intercontinental parcel tanker, coastal parcel tanker, river parcel tanker, tank container, terminal and rail services.

As of April 30, 2007, SNTG is, based on the deadweight tons of the fleet, one of the largest operators of parcel tankers in the world, and, based on the number of tank containers, is the largest operator in the tank container market. Parcel tankers and tank containers carry similar products, with parcel tankers typically used to transport cargo lots greater than 150 metric tons, while tank containers are typically more economical for transportation of smaller cargo lots.

We utilize our terminals to improve the operational efficiency of SNTG’s parcel tankers. Our terminals offer storage and distribution services to the same customers that use our parcel tanker and tank container operations and can store and distribute the same products. We can reduce the amount of time our ships spend in port when our customers use our terminal facilities, enabling us to operate more efficiently. The terminals are not only available to our tanker customers, but operate as independent third-party facilities open to all customers and ship owners on a first-come-first-served basis. As of April 30, 2007, we owned and operated two tank storage terminals in the U.S., in Braithwaite, Louisiana and in Houston, Texas, and one in Santos, Brazil. These three facilities had a combined capacity of approximately 4.6 million barrels of liquid storage as of April 30, 2007. As of April 30, 2007, our terminal operations also had interests in three operational joint ventures consisting of (i) a 49% interest in Stolthaven Westport Sdn. Bhd., a joint venture which has a terminal facility in Westport, Malaysia (ii) a 50% interest in Jeong-IL Stolthaven Ulsan Co. Ltd. which has a terminal facility in Ulsan, South Korea and (iii) a 50% interest in Oiltanking Stolthaven Antwerp N.V. which has a terminal facility in Antwerp, Belgium. We account for the results of these joint ventures under the equity method of accounting.

On June 12, 2006, SNTG announced the signing of two joint venture agreements with the Lingang Harbor Affairs Company in Tianjin, China for the long-term lease of waterfront property upon which a new chemical and oil products terminal is to be designed and built by SNTG. The terms of the joint venture agreements establish two joint venture companies, one that owns the terminal for bulk-liquid storage, and one that owns the jetty and dock facilities. SNTG owns 65% of the Tianjin Stolthaven Terminal Co. Ltd and 40% of the Tianjin Stolthaven Jetty Co. Ltd. The initial phase of the terminal development is anticipated to include the construction of 47 storage tanks, with a total capacity of 1.1 million barrels, and a jetty at a total estimated investment of $58 million. SNTG’s share of the investment is anticipated to be $23 million. The terminal’s first jetty became operational in November 2006 and will be contributed to the joint venture in 2007 while the terminal is planned to be operational in the first quarter of 2008.

On July 21, 2006, a subsidiary of SNTG, entered into the Oiltanking Stolthaven Antwerp N.V. joint venture with Oiltanking GmbH . The terminal, which is situated in the Port of Antwerp, Belgium, has a capacity of 3.1 million barrels of liquid storage serving the liquid chemical, gas and petroleum markets. The joint venture agreement also contemplates the completion of a new finger pier and commitments have been approved for an additional 2.2 million barrels capacity to be completed between 2007 and 2009. The total cost of these commitments by the joint venture company is approximately $108 million.

On December 21, 2006, SNTG announced the signing of an agreement with CITIC Daxie Development Co. in Ningbo, China to establish a joint venture to design, construct, own and operate a

state-of-the-art chemical and oil products terminal on Daxie Island. Each party owns 50% of the newly formed joint venture company, Stolthaven Ningbo, Ltd. The business license and certificate of approval for the joint venture was received on January 29, 2007. The initial phase of development is anticipated to include the construction of 23 storage tanks, with a total capacity of 1.2 million barrels at a total estimated investment of $44 million. Our share of the initial investment is $22 million. We expect the terminal to be operational in 2008.

For additional information on SNTG, see Item 4. “Information on the Company—Business Overview—Stolt-Nielsen Transportation Group.”

Stolt Sea Farm

Until April 29, 2005, SSF produced, processed, and marketed a variety of high quality seafood. SSF had salmon production sites in Norway, North America, Chile and Scotland, salmon trout production sites in Norway and Chile, a tilapia production site in Canada, turbot production sites in Spain, Portugal, Norway, and France, a halibut production site in Norway, a Southern bluefin tuna ranching operation and production site in Australia and sturgeon and caviar production sites in the U.S. Although SSF diversified into farming species other than salmon, salmon remained the primary focus. SSF had worldwide marketing operations with sales organizations covering the Americas, Europe, and Asia Pacific, and built a substantial seafood trading and distribution business in the Asia Pacific region.

In September 2004, we announced an agreement with Nutreco to transfer most of our respective worldwide fish farming, processing and marketing and sales operations to a joint venture called Marine Harvest. The transaction closed on April 29, 2005. We retained our turbot and sole operations in Europe, and Southern bluefin tuna ranching operations in Australia, with combined total annual operating revenue in 2006 of $60.3 million, which were not included in the Marine Harvest joint venture.

On December 18, 2006, we announced the sale of SSF’s Southern bluefin tuna business, based in Port Lincoln, Australia, to SAMS Holdings (SA) Pty. Ltd. for proceeds totaling AUS $90.0 million (U.S. $70.0 million at then current exchange rates). We recognized a gain of $44.3 million on the transaction in its first quarter of 2007.

On December 22, 2006, we announced the completion of reacquisition from Marine Harvest of a 75% equity interest in its sturgeon and caviar business, Sterling Caviar LLC, for a total purchase price of $3.8 million and the assumption of loans of $1.3 million, which represents the existing book value of the operations.

As a consequence of these various transactions, SSF’s current and ongoing operations are comprised of its turbot and sole operations in Europe and its sturgeon and caviar business in the U.S.

Unconsolidated Joint Venture

Marine Harvest

While we owned Marine Harvest it was the world’s largest producer and supplier of farmed salmon in the world and was also an important supplier of sea trout. Marine Harvest’s main seafood markets were Asia, North America and Europe. On March 6, 2006, we announced the sale of our entire 25% ownership interest in Marine Harvest and on December 29, 2006, we announced we had completed the sale. The results of our 25% ownership in Marine Harvest have been included using the equity method in our reported consolidated results through the fourth quarter of 2006 because the formal transfer of ownership was completed only in the first quarter of 2007. We recorded a gain of $21.8 million on this transaction in the first quarter of 2007 based upon the value of our investment in Marine Harvest.

For a summary of the terms of the agreement for the sale of Marine Harvest, see Item 10. “Additional Information—Material Contracts—Share Purchase Agreement for the Sale of Marine Harvest.”

Discontinued Operations

Stolt Offshore

During the period covered by this management review, SOSA designed, procured, built, installed and serviced a range of surface and subsurface infrastructure for the global offshore oil and gas industry.

Following the sale of SOSA on January 13, 2005, we reclassified our previously issued consolidated financial statements to reflect SOSA as discontinued operations.

Factors Affecting Our Financial Condition and Results of Operations

Factors Affecting SNTG

Parcel Tankers Market Dynamics

Certain customer restrictions, the number of new ships delivered into the market and the scrapping of older ships constitute the most significant influences on the supply of parcel tankers.

The age of a ship is an important consideration when determining where a ship is able to trade. While there continue to be opportunities to use older ships successfully, there can, in some circumstances, be limitations imposed by certain customers. In the past we have not operated ships past 30 years of age, as the expense to extend the lives of ships of that age is significant. In addition, several of the major oil companies and certain chemical companies (including some of SNTG’s customers) have placed restrictions on the maximum age of the ships that can carry their cargoes. These age restrictions are typically set at 20 to 25 years, but there is a range depending on trade route, tonnage classification, inspection routines and the ship’s condition. We manage our SNTG fleet within these restrictions by carefully matching our ships with customer requirements. SNTG operates 13 ships built between 1976 and 1980 with single-sides/double bottoms. These ships face and will continue to face limitations on their use imposed by certain customers during 2007. These limitations do not apply to the carriage of all chemicals. We may reassign such single-sided/double bottom ships to certain customers that do not impose such restrictions. If it is not viable to utilize these ships economically, we may recycle them. As demand for ships is high and the availability of space at shipyards to build new ships is limited, we have extended the operating life of three of our ships beyond 30 years of age to meet our customers’ demand and we may extend the operating life of more of our ships in the future.

From 2007 to 2009, we expect growth in demand for parcel tankers to match the growth in supply of ships. Independent market sources project future demand growth for parcel tankers of 3% to 4% annually. Based on independent market sources, we believe that as of April 30, 2007, the total deep-sea fleet of parcel and chemical product tankers is composed of 786 ships totaling 21 million dwt. As of the same date, our fleet, together with that of our 18 core competitors, is composed of 409 ships in excess of 10,000 dwt and totaling 10 million dwt. We refer to this as the “core fleet”. We expect that over the period 2007 to 2012, approximately 12% of the core fleet will be scrapped or downgraded as ships reach 30 years of age or are removed due to customer restrictions. Within the same period, we expect new ship deliveries of approximately 36% of the current core fleet, with about 23% of these deliveries taking place in 2007. We do not expect these deliveries to increase significantly from 2007 to 2008 as numerous factors limit supply-side expansion. The cost of new parcel tankers has stayed relatively constant during 2006 at historically high levels as a result of high steel prices and in response to heavy orders for all ship types, with 299 million dwt of mid-to-large size tankers, dry bulk ships and container ships on order at the end of 2006 compared to 223 million dwt at the end of 2005. Shipyard order books are generally full, with little capacity available

before late 2009. Shipyards are hesitant to quote pricing on ship deliveries three years in the future, as they incur considerable risk in the cost of steel, especially stainless steel for the tanks for parcel tankers.

Many factors may influence the demand for parcel tankers. A relatively healthy global economy in 2006 continued to drive strong demand for chemicals. Asian exports of chemicals, lubricants, oleo chemicals and biofuel mixtures to Europe and the U.S. have steadily risen over the last few years, while Asian (notably China) demand for chemical imports from all major chemical producing regions also showed ongoing growth in 2006. Increased demand for the transport of clean petroleum products and growing exports of commodity chemicals from the Middle East will also impact demand. MARPOL regulations that came into effect as of January 1, 2007 will place more stringent carriage and handling restrictions for the transportation of vegetable oils and various chemicals, which in turn is expected to increase demand for chemical tankers. This effect was already noticeable in the second half of 2006.

The clean petroleum products market is large, with many ships operating in this sector. Some ships that are a part of our deep-sea fleet of parcel and chemical product tankers can be used in either the chemical market or the clean petroleum products market depending on earnings. The clean petroleum products market is more volatile with demand for transporting clean petroleum products such as gasoline, jet fuel and heating oil driven by customers’ short-term inventory balancing needs. In general the clean petroleum products market in 2006 was comparable to that of 2005. China is a large importer of clean petroleum products as is the U.S., where refinery capacity was not able to follow demand, requiring more imports. There was significant volatility reflected in high freight rates when stocks were built up for the anticipated hurricane season and low freight rates due to mild winter weather conditions resulting in lower demand for heating oil in late 2006.

Historically, the U.S. Gulf has been a key production center for the chemical industry and, although we believe it will remain so for many years to come, we also believe evidence that this concentration may shift, subject to short-term variations in the global chemical industry. The U.S. chemical industry developed around the U.S. Gulf because of the availability of low-cost natural gas feedstock for use in the production of certain fuel and chemical products. However, the increased U.S. domestic consumption of natural gas has resulted in an increased dependence on imports of natural gas and a rise in its price. The global chemical industry is expanding with very few new plants being built in the U.S. Many of the new chemical plants are being built in the Middle East where oil feedstock for chemical plants is among the cheapest in the world. Additionally, we anticipate that the focus of new production capacity will be commodity chemicals rather than specialty chemicals. It is our expectation that over time this will result in a change in trade patterns with reduced demand for parcel tanker services outbound from the U.S. for commodity chemicals. We expect this to be partially offset by increased transport of commodity chemical from the Middle East into the U.S. and Europe. Overall, we expect demand for transportation services of specialty chemicals to continue to grow, albeit at growth rates that are expected to be moderate. These changes are expected to happen over time and be subject to short-term variations.

The IMO has adopted amendments to Annex II of the International Convention for the Prevention of Pollution from Ships 73/78 (MARPOL Annex II) and the International Bulk Chemical Code (“IBC Code”) that took effect January 1, 2007. MARPOL Annex II regulates the carriage of all chemicals, vegetable oils and animal fats. MARPOL Annex II requires that these products be transported in either an “IMO I”, “IMO II” or “IMO III” chemical tanker. Broadly speaking, an IMO I ship or IMO II ship is a chemical tanker built to carry the more hazardous classes of chemicals, while a ship rated IMO III is built to handle less hazardous chemicals and does not necessarily have a double hull. The changes in the Marpol Regulations, and subsequent amendments to the IBC Code mean that a number of products, such as palm oil, coconut oil, palm fatty acids and certain chemicals, that could previously be carried in Type III tanks (single-hull ships) must now be carried in Type II (double-hulled ships), and therefore we expect increased demand for such ships. As 72% of the ships in our fleet are double-hull ships, we believe that we are well

placed to service this new requirement. We believe that this should increase demand for our parcel tankers.

Fleet Replacement Strategy

We plan to replace older ships by purchasing existing ships in the market or having new ships built. Since the beginning of 2005 we have entered into several commitments for the building of new ships at various shipyards. See Item 4. “Information on the Company—Business Overview” for a summary of the 29 newbuildings that will be either owned or operated by SNTG within its wholly owned operations or joint ventures as well as for ships we have recently purchased in the open market.

SNTG has also entered into agreements with various Japanese ship owners for time-charters (operating leases) for 12 ships with stainless steel tanks. As of November 30, 2006, eleven time-charters had commenced with one remaining ship to be delivered in 2008. The 12 time-charters are for an initial period from 36 to 96 months and all include options for SNTG to extend the agreements for up to nine additional years. SNTG also has the option to purchase each ship at predetermined prices, at any time after three years from the delivery of the ship. As of November 30, 2006, the future lease payments to be made by SNTG to the owners of the 12 ships for the initial lease periods are $212 million in the aggregate. Eleven of the time charters have been or will be entered in the STJS and one (Stolt Distributor) is trading in the Stolt-Nielsen Inter Asia Service. For additional information, see “Application of Critical Accounting Policies—Revenue and Cost Recognition”.

Trends in Spot Rates and Contracts of Affreightment

Cargo may be transported on parcel tankers under Contracts of Affreightment (“COA”) COA are agreements between an owner/operator of parcel tankers and its customers to transport agreed volumes of product(s) at agreed rates, usually involving multiple shipments over a certain time period, typically one or two years although some contracts may be for longer periods. Cargo may also be transported under a spot contract for a single shipment. Freight rates agreed on the basis of spot rates are highly correlated with the supply of and demand for ships (i.e., utilization rates of ships) and may change on a daily basis. COA rates, however, are set for a specified period over time and adjustments of COA freight rates and other terms, such as demurrage rates or bunker fuel indices generally lag spot rate changes. Approximately 69% of our 2006 parcel tanker revenue was generated from COA as opposed to spot rates. Spot market trends during 2006 were mixed. U.S. Gulf chemical production largely recovered from the unusually severe hurricanes in the U.S. Gulf during 2005 causing a rebound in U.S. exports. Independent ship broker market indices reflected little change in the U.S. Gulf to Asia tradelanes for both commodity and specialty chemical shipments until late in the year when both spiked upward. The U.S. Gulf to Europe tradelanes experienced steady improvement during the year while the Europe to U.S. Gulf tradelanes declined. The Europe to Asia tradelanes experienced minor fluctuations while Europe to India declined in the early part of the year but recovered in the latter part. Rates for shipments of specialty chemicals remained flat in the U.S. Gulf to Brazil tradelane while commodity shipments improved over the course of the year. Average per metric ton freight rates across all tradelanes have increased in the STJS from 2003 through 2006 by over 40 percent. SNTG expects the chemical transportation markets to remain around current levels throughout 2007 due to the tight supply of available tonnage and the continued growth in the world economy.

Growth in the Tank Container Market

Our market experience indicates that shipping chemicals, vegetable oils and other liquid products in tank containers typically results in lower shipping expenses due to increased cargo capacity compared to conventional 55-gallon drums in a 20-foot dry box container, and decreased handling expenses. As drums must be disposed of, there is also a decreased exposure to risk of possible environmental contamination when using tank containers. It is our experience that as businesses and national economies grow, so does

the demand for shipping by tank containers, as tank containers are more reliable and economical means of transportation than drums in a 20-foot dry box container. We intend to continue to expand our tank container business in response to the needs of customers, particularly in the chemical and food-grade markets. We intend to expand our product portfolio through the use of flexibags. Flexibags (also known as flexitanks) are large, disposable polyethylene, rubber or thermo-plastic bags that fit inside a standard 20-foot dry box container and can be used to transport non-hazardous and food grade products. We also expect SNTG to continue developing cleaning and maintenance facilities for tank containers. Container shipments were 81,259 in 2006 as compared to 80,874 in 2005 and 84,262 in 2004. This reflects an increase of 1% from 2005 to 2006 compared to a decrease of 4% from 2004 to 2005. Since 2005, we have focused our sales and marketing efforts on the most profitable sectors of our business and reduced volume in less profitable areas. This, along with a sluggish U.S. export market in the third quarter of 2005 and first half of 2006, led to the reduction in shipments from 2004 to 2005 and basically flat growth in 2006. The success of this shift in focus resulted in increased profitability. While we will continue to focus on our profitable volume, overall, we expect shipment growth of approximately 7 to 9 percent in 2007 due to increased activity in all sectors of the market, including our food grade business.

Bunker Fuel Costs

The cost of bunker fuel, which is the fuel used for our ships, has historically been the largest portion of variable operating expenses in our shipping business. In 2006, bunker fuel for SNTG’s tanker operations constituted approximately 28% of the total operating expenses for tankers. The increase in SNTG’s operating expenses in 2006 was primarily due to increases in the price of bunker fuel. In 2006, the average price of bunker fuel purchased by SNTG was approximately $311 per ton. This compares to the average bunker fuel price for 2005 of approximately $265 per ton and for 2004 of approximately $187 per ton. The rising trend in bunker prices commenced in late 2001. The steep increase from 2004 to 2005 was precipitated by booming economies in China and India causing an increased consumption of oil, a shortage of global refining capacity and a record number of hurricanes that impacted production and refining in the U.S. During 2006 global oil prices fluctuated based on fears of supply disruption. Bunker fuel prices are directly impacted by crude oil prices. Crude oil prices reached a record high in July 2006 coinciding with the conflicts and or unrest in Israel, Lebanon, Iraq and Nigeria, the emergence of Iranian and North Korean nuclear ambitions and a forecast of severe U.S. Gulf hurricanes. Crude oil prices subsequently fell in December 2006 when the extent of the conflicts had diminished and the U.S. Gulf escaped significant hurricane activity. A mild early winter in the U.S. Northeast also led to a build up of crude oil and related fuel stocks and further downward pressure on prices. We attempt to pass through to our customers fuel price fluctuations under our COA. During 2006, approximately 69% of tanker revenues earned under COA were earned under contracts that included provisions intended to pass through to customers fluctuations in fuel prices. The profitability of the remaining 31% of tanker revenue earned under COA was directly impacted by changes in fuel prices.

We seek to minimize our overall bunker fuel cost by hedging a limited proportion of our exposure through the use of swaps. We recorded net bunker hedge gains of $1.9 million in 2006, $1.8 million in 2005 and $3.1 million in 2004. Our hedging activities are discussed in more detail below under Item 11. “Quantitative and Qualitative Disclosures about Market Risk.”

Given the size and configuration of the STJS in 2006, we estimate that a 10% change in the price of bunker fuel per ton from average 2006 bunker fuel prices would result in an approximate $21 million to $22 million change in gross profit. This excludes gains or losses which may arise from the impact of bunker hedge contracts and bunker surcharge clauses included in certain COA as well as the impact of changes in bunker prices on our regional fleets.

Legal Proceedings

In 2006, 2005 and 2004, we were involved in significant legal proceedings, primarily related to certain antitrust investigations described below. We incurred antitrust related legal costs of $42.0 million in 2006, $30.2 million in 2005 and $20.1 million in 2004, to address these issues and expect that we will continue to incur significant legal costs until these matters are resolved. We also suffered significant distraction of management time and attention related to these legal proceedings. These matters are at early stages and it is not possible for us to determine whether or not an adverse outcome is probable or, if so, what the range of possible losses would be. We are presently defending against criminal prosecution and could suffer substantial and material fines or penalties or civil penalties, including significant monetary damages as a result of these matters. As of November 30, 2006 and February 28, 2007, we had not established any reserves for potential unfavorable outcomes related to these proceedings.

Governmental Antitrust Investigations

In 2002 we became aware of information that caused us to undertake an internal investigation regarding potential improper collusive behavior in our parcel tanker and intra-Europe inland barge operations. As a consequence of the internal investigation, we voluntarily reported certain conduct to the Antitrust Division.

As a result of our voluntary report to the DOJ concerning certain conduct in the parcel tanker industry, we entered into an Amnesty Agreement with the Antitrust Division, which provided that the Antitrust Division agreed “not to bring any criminal prosecution” against us for any act or offense we may have committed prior to January 15, 2003 in the parcel tanker industry to or from the U.S., subject to the terms and conditions of the Amnesty Agreement, including continued cooperation. On February 25, 2003, we announced that we had been conditionally accepted into the DOJ’s Corporate Leniency Program with respect to possible collusion in the parcel tanker industry. At the same time, we also announced that the EC had admitted us into its Immunity Program with respect to deep-sea parcel tanker and intra-Europe inland barge operations. Acceptance into the EC program affords us immunity from EC fines with respect to anticompetitive behavior, subject to our fulfilling the conditions of the program, including continued cooperation. It is possible that in the future national authorities in Europe, or elsewhere, will assert jurisdiction over the alleged activities. It is also possible that the EC could assert that we have not or are not fully complying with the terms and conditions of the immunity program. If this were to happen, we could be partly or fully removed from the immunity program and subject to substantial and material fines and penalties.

On March 2, 2004, the Antitrust Division purported to void our Amnesty Agreement with the DOJ and revoke our conditional acceptance into the DOJ’s Corporate Leniency Program. We sought to enforce the Amnesty Agreement through legal proceedings. On January 14, 2005, the U.S. District Court for the Eastern District of Pennsylvania entered a judgment in our favor and enforced our Amnesty Agreement, enjoining the Antitrust Division from bringing a criminal prosecution for antitrust conduct in the parcel tanker industry covered under the Amnesty Agreement. The DOJ subsequently appealed the District Court’s order.

On March 23, 2006, a two-judge panel of the U.S. Court of Appeals for the Third Circuit reversed and remanded the District Court’s ruling for further proceedings. The panel’s decision did not address the merits of our arguments regarding the effect of the Amnesty Agreement. Instead, the decision was based on the determination that the District Court did not have the authority to issue a pre-indictment injunction, premised on separation of powers grounds. Although we sought further review and appeal of the Third Circuit decision, we were unsuccessful.

STOLT NIELSEN S A 6-K